Indonesian President Susilo Bambang Yudhoyono has thrown the Labor government a lifeline on asylum seekers, offering his own solution to the problem while repudiating Opposition Leader Tony Abbott’s plan to turn boats around.

The Indonesian president on Friday offered to host a dedicated summit aimed at solving the problem which has dogged relations between Jakarta and Canberra, and was front and centre at talks with Prime Minister Kevin Rudd.

Taking a stand: Prime Minister Kevin Rudd and Indonesian President Susilo Bambang Yudhoyono after the annual Australia-Indonesia Leaders' meeting. Credit:Alex Ellinghausen

But even as Dr Yudhoyono was hosting Mr Rudd at a presidential palace in Bogor, near Jakarta, it emerged that a boat carrying about 80 asylum seekers was the subject of an ongoing search and rescue operation in waters between Java and Christmas Island.

The Australian Maritime Safety Authority (AMSA) confirmed that it had issued an alert to ships in the area that the boat was taking on water.