SECRET United States embassy cables have sharply criticised the handling of asylum seekers by the former prime minister Kevin Rudd and accused both Labor and the Coalition of playing partisan politics with the issue.

The cables reveal that a close adviser to Mr Rudd failed to persuade him to use the government's powers ''to calmly and rationally put the issue in perspective'' by acknowledging that only a small number of asylum seekers were arriving by boat compared with tens of thousands overstaying their visas each year.

A cable obtained by WikiLeaks and provided exclusively to the Herald says an unnamed "key Liberal Party strategist'' told US diplomats in November last year that the issue of asylum seekers was ''fantastic'' for the Coalition and ''the more boats that come the better''.

US embassy reports last year reflect growing Labor concern with the increasing number of asylum boats. American diplomats quickly identified people smuggling as a crucial political test for Mr Rudd.