The federal government has paid compensation to a charity group it wrongly accused of trying to embarrass the former Abbott administration by encouraging asylum seekers at Nauru to harm themselves, conceding the allegations were baseless.

However it stopped short of apologising to the organisation, Save the Children Australia, whose staff have suffered mental illness, unemployment and travel bans following the incident, during which they were forcibly deported by armed guards.

Then immigration minister Scott Morrison ordered that 10 Save the Children staff be taken off Nauru, accusing them of orchestrating detainee protests.

The admissions cast doubt on the veracity of Immigration Minister Peter Dutton's claims this week that refugee advocates, rather than his government's policies, had encouraged refugees at Nauru to self-harm after two people set themselves on fire in separate incidents – one fatally.

Mr Dutton provided no evidence of those allegations, saying only they were based on "advice", "intelligence" and a social media analysis.