An aslum seeker boat has capsized nearly 200 kilometres off Christmas Island.

Hope is fading for scores of asylum seekers still missing after their boat capsized overnight 200km northwest of Christmas Island.

Indonesian and Australian authorities have rescued 109 people, including a 13-year-old boy, but have also pulled three bodies from the water.

About 90 more people are unaccounted for. All on board were male.

Home Affairs Minister Jason Clare says surveillance aircraft over the area have spotted more bodies but no more survivors.

"I think we need to brace ourselves for more bad news," Mr Clare told Sky News this afternoon.

He said it was still possible that rescuers would find more survivors but he admitted the situation was becoming "increasingly grim" as sea conditions deteriorated.

The overcrowded boat capsized about halfway between the Indonesian island of Java and Christmas Island yesterday. The survivors have been taken to Christmas Island.

The survivors have been transported to Christmas Island. Two of them are injured, one critically.

HMAS Larrakia and several merchant vessels are continuing the search for survivors while HMAS Wollongong and more merchant vessels are en route.

Mr Clare said the water temperature was 29 degrees. "People can survive out there for up to 36 hours if they have life jackets or debris to hang on to."

He also revealed that the boat's crew first made a distress call to Australian authorities on Tuesday night and made another early on Wednesday morning.

Australian officials advised them to turn around and head back to Indonesia, before telling Indonesian authorities of the boat's location.

A Customs and Border Protection surveillance plane spotted the boat on Wednesday afternoon but reported no visual signs of distress.

Mr Clare dismissed suggestions that Australian authorities could have done more sooner.

"I'm not going to second-guess today the action they have taken other than to say it looks like they took proactive steps," he said.

Nonetheless, a full investigation into the incident would be undertaken, he said.

The injured have been taken to Christmas Island for care. "Australian search and rescue authorities have acted very proactively," he said.

Prime Minister Julia Gillard spoke with Indonesian President Susilo Bambang Yudhoyono in Rio de Janeiro, where they are attending a UN environment conference.

"At this stage details are sketchy but what is apparent is there has been a large loss of life at sea," Ms Gillard said. "This is a very distressing and tragic incident."

"Australia is a place with a very long coastline, but unfortunately a coastline that has its dangers. And today our nation has been reminded of those dangers due to the loss of a boat at sea causing loss of life."

"The ocean can be a beautiful place but sometimes a dangerous place as well."

Opposition Leader Tony Abbott said the sinking of an asylum boat off Western Australia is tragic and not an occasion for political point scoring.

"It shows what a horrible business this whole people smuggling racket is," Mr Abbott told the Nine Network today.

"Obviously it's important we stop it one way or another, but I don't think today is a day for politics.

"It's a day for human sympathy for everyone caught up in this terrible disaster and support and encouragement for the rescue effort."