Australian senators have rejected laws that would have let the country deport asylum seekers to another country as a way of discouraging them from attempting the long, dangerous boat journeys.
After they failed to find a compromise on the divisive issue before parliament went on a six-week winter break, the politicians were warned on Friday of more asylum-seeker boat deaths.
Parliament broke up on Thursday after the opposition in the senate and Greens MPs, on whom the government relies for its rule, rejected a private member's bill to send boatpeople offshore for processing.
Independent MP Andrew Wilkie said parliamentarians should not be going into recess when such an important matter remained unresolved.
"We should be sitting today, we should have continued sitting last night, we should sit next week, we should sit until we get a solution," he told state broadcaster ABC.
"I think there is every chance in the world that more people will die during this six-week recess," he said.
The bill was introduced after two crowded asylum-seeker boats sank off the remote Australian territory of Christmas Island, near Indonesia, over the past week.
In the first incident, 110 people were saved and an estimated 90 drowned while the sinking of a second boat on Wednesday left four dead, with 130 rescued.
With few legislative options left, Prime Minister Julia Gillard commissioned an expert review led by former defence force chief Angus Houston to look at the policy with "fresh eyes".
She promised to take on board whatever it suggested, but would not commit to dropping her controversial Malaysia people-swap plan if doing so was recommended.
Opposition leader Tony Abbott described her move as a pointless exercise.
"This committee is not a solution. This is outsourcing the prime ministership," he said as politicians began leaving Canberra for their constituencies.
Since January a stream of asylum-seekers have attempted to reach Australia by boat, with the latest vessel carrying 44 passengers intercepted overnight taking the 2012 total to 68 boats with 5,046 on board.
Most come from Indonesia on unseaworthy vessels.
The government wants to send them to Malaysia for processing, but the opposition refuses to agree, arguing Kuala Lumpur is not a signatory to UN refugee conventions.
Abbott favours re-opening a detention centre on the Pacific island of Nauru and turning boats back where possible. The left-leaning Greens are opposed to any offshore processing.