A major riot has broken out at a remote detention centre for asylum seekers in the Indian Ocean.

Australia's immigration department said there was a "major disturbance" at the detention centre on the country's territory of Christmas Island, with reports of damage but no injuries.

Refugee advocates said the riot broke out following the death of an asylum seeker who escaped from the centre on Saturday. The man's body was found the following day at the bottom of cliffs on the island. His death is being investigated.

The department denied there was a "large scale" riot, but said staff had withdrawn from the compound for safety reasons.

The problem began when a small group of Iranian detainees staged a peaceful protest following the asylum seeker's death. Other detainees then began damaging the property, starting several small fires, according to the department.

The group leading the unrest appeared to be detainees being held there because their visas were cancelled, rather than asylum seekers, the department said.

New Zealand MP Kelvin Davis, who recently visited the island, said a New Zealander held there told him that detainees had taken over the centre.

"They have put holes in the walls, so even if they are rounded up and put back in the cells they actually can't be locked up," Mr Davis told the Australian Broadcasting Corporation.

The immigration department said the perimeter was secure.

Australia has taken a tough stance in recent years on asylum seekers who try to reach its shores illegally.

Asylum seekers who pay people smugglers to take them in rickety boats to Australia from Indonesia are detained on Christmas Island and on the impoverished Pacific island nations of Nauru and Papua New Guinea.

Immigration minister Peter Dutton said one detainee caught up in the fray had requested medical assistance for an unspecified reason, but no serious injuries had been reported.

Last year Australia strengthened its power to cancel visas, making it mandatory if a person had been sentenced to at least a year in jail. That has led to an influx of New Zealanders with criminal records - some of whom were long-term residents of Australia - ending up in immigration detention while they await deportation. Some are appealing against the government's decision to revoke their visas.

New Zealand prime minister John Key said he was told there may be a few New Zealanders involved in the unrest and if so, they were doing nothing to help their case to stay in Australia.

"The risk is that they actually damage their own appeals because they undertake other criminal activity," he said.