The issue of whether Australian officials paid six people smugglers US$5000 each after turning their boat back to Indonesia – first reported last week by Fairfax Media – dominated Parliamentary question time on Monday, while a top former prosecutor said Australian officials could be liable for criminal charges.

"The amount of money that was allegedly paid is nothing in comparison to the cost of processing the excessive amount of people who came to Australia as a result of people smuggling activity," Mr Ruddock told a News Corp paper .

But some MPs downplayed the claims. MP Philip Ruddock, a former immigration minister and now the Prime Minister's special envoy for citizenship and community engagement, said the government would still be saving money if it did pay off the people smugglers, though he stressed he was not commenting on the veracity of the claims themselves.

Queensland Liberal Andrew Laming said even if the government had been paying off criminal gangs, it wasn't of interest to his electorate.

Ms Bishop told The Australian newspaper on Monday that the best way for Indonesia to resolve any concerns it had about Operation Sovereign Borders was for Indonesia to enforce sovereignty over its borders.

But Mr Barnas, the spokesman for Indonesia's Coordinating Ministry for politics, law and security, hit back, saying: "She cannot say that. If we did not protect our border more and more boats would be going to Australia. We arrest many asylum seekers who want to go on boats. If only one boat or two escape our guard and go to Australia it's only normal because we have a very long coastline and not enough people to guard it."

Sources in Indonesia and Australia have confirmed that the navy ship that intercepted the asylum seekers was the HMAS Wollongong, Armidale Class Patrol Boat 92. The Australian official, named as "Agus", who allegedly paid the six crew members, moved between the Wollongong and a customs ship.

He did not wear a uniform but appeared to have authority and was treated with respect by other Australians, sources said.