The country’s prime minister, John Key, says the ‘sensible and compassionate’ offer still stands despite Australia ‘historically rejecting it’

Asylum seekers facing deportation to Nauru and Manus Island by the Australian government could go to New Zealand if they are found to be refugees, the country’s prime minister has said.

On Monday John Key indicated his country could provide a solution to the standoff over the 267 people slated to be returned to offshore processing centres.

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In 2013 agreement was brokered between his and the then prime minister Julia Gillard’s government. The agreement allows for New Zealand to take 150 refugees a year from Australia’s immigration system as part of its annual intake of 750 people.

Key reiterated the “sensible and compassionate” offer still stood, if Australia asked, Fairfax reported.

“Historically the Australians have said no but it is part of the 750 allocation that we have and if they wanted us to take people then – subject to them meeting the criteria – the New Zealand government would be obliged to do that because we’ve given that commitment that we’d do so,” Key said ahead of a meeting with the Australian prime minister, Malcolm Turnbull.

In January Guardian Australia reported that Australia had never taken up the offer but it remained open, despite the former prime minister, Tony Abbott, effectively shelving when he took office.

Among those facing deportation are 37 babies born in Australia to asylum seeker parents, and another 54 children, some of whom are attending school. A high court decision this month ruled Australia’s offshore processing regime legal. The government had introduced retrospective legislation after the case had begun.

Key said it was “potentially possible” the 37 babies could be accepted by New Zealand but “it would need to fit within the criteria that they are refugees as defined by the broader category that we take”.

Should it go ahead, a transfer would probably have to happen after July. A spokeswoman for New Zealand’s immigration minister, Michael Woodhouse, told Guardian Australia this year’s 150 places had been absorbed into the total 750 and used to accommodate Syrian refugees.

Key’s suggestion is likely to fuel community pressure on the Australian government over its plans to return the asylum seekers to Manus and Nauru, where abuses against asylum seekers have been documented. Mass protests have called for an amnesty allowing the asylum seekers – and particularly the Australian-born babies and their families – to be allowed to stay.

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State leaders on both sides of politics have offered to take the asylum seekers, and a number of churches have offered sanctuary – an ancient biblical concept that is not legally recognised in Australian law.

A Brisbane hospital has refused to discharge a baby, known as Asha, because it believes Nauru is not a safe environment for a child. Other medical workers have also spoken out in defiance of the Border Force Act which criminalises the discussion of detention conditions by “entrusted persons”.

This week the leading medical journal the Lancet described Australia’s offshore detention policies as “scandalously objectionable”.

Turnbull and Australia’s immigration minister, Peter Dutton, have said the government must continue its hard-line stance to prevent a resurgence in people smuggling.