Julia Gillard: 'If people want to put up banners that this is a compromise from the government: dead right – in order to start saving lives.' Credit:Andrew Meares In a tough report leaning more to the Coalition's preferred policy than Labor's way, the government-appointed panel headed by former defence chief Angus Houston urged that Nauru and Manus Island be opened as soon as possible. But it said that while Labor's Malaysia people swap should be pursued, it needed more human rights protections before going ahead. The chances of Malaysia being willing to negotiate further, however, appear minimal. The government, which only received the Houston report at 7am, immediately accepted in principle all 22 recommendations, costing an estimated $1 billion annually, in a determined attempt to stop the boats and get the asylum seeker issue off the agenda. The opposition was waiting last night for the detail of today's amendment - to legislation already before Parliament - but is likely to back it. Opposition immigration spokesman Scott Morrison said he wanted an assurance the amendment would not allow the government to bring in the Malaysia option ''by the back door''.

The legislation will provide that countries can be nominated as processing centres, with Parliament able to disallow a country. Mr Houston said the panel's approach was ''hard-headed but not hard-hearted … realistic not idealistic'', driven by ''humanity as well as fairness''. And, in a ''balanced'' package, the refugee intake would rise from 13,750 to 20,000 annually, and eventually to a potential 27,000. Under the panel's ''no advantage'' policy, people processed on Nauru and Manus would wait for a visa to settle in Australia for as long as it would have taken if they had come through regular channels. This could lead to the sort of long waits experienced by asylum seekers under the Pacific Solution, although Mr Houston did not think it would be as long as five years. Caucus agreed to the Houston package, after Left MPs' objections to indefinite mandatory detention on Nauru and Manus were voted down, as was a move by Left convener Doug Cameron for a delay to give caucus time to consider the report. The government agreed to a proposal for caucus to monitor the detention regime.

The panel was set up at the end of the last parliamentary session to come up with a way to break the political deadlock that has rendered the government impotent to act against the increasing flow of boats. While urging a regional solution, the panel said that a short-term ''circuit breaker to reduce the attractiveness of Australia as a destination'' was needed. Legislation for offshore processing was urgent, it said. Mr Houston said the panel had accepted Nauru and Manus because they were ''implementable straight away''. The panel also said that boat people should lose their access to family reunions under the humanitarian program - which means they would have to take their chances through the family stream of the general migration program. The report said there were concerns about the protections and human rights aspects of the Malaysia agreement from ''a wide range'' of groups and individuals. It called for better protections and a more effective monitoring mechanism. The panel said of the opposition's policy of turning boats back that the conditions did not currently exist for it - Indonesia would not accept them and people smugglers had more sophisticated tactics in sabotaging the attempts.

Mr Morrison said the Houston panel had ''green-lighted Nauru and they have red-lighted Malaysia and the people swap in its current form''. The blueprint from the panel, which included refugee expert Paris Aristotle and former Foreign Affairs secretary Michael L'Estrange, was condemned by the Greens and refugees advocates. Greens leader Christine Milne said her party would not accept measures that were cruel to people. Dr Graham Thom, Amnesty International's refugee spokesperson, said the government's action showed short-term political gains trumping Australia's obligations under the UN Refugee Convention. But Mr Houston said the prospect of further losses of life at sea demanded ''urgent and decisive action '' by Parliament. Since October 2009, 604 people had lost their lives.

Another boat arrived yesterday, with 87 people on board - but they came before the deadline and will not be subject to offshore processing. Loading With Daniel Flitton, David Wroe and Jo Chandler Follow the National Times on Twitter