Immigration Minister Chris Bowen has ordered an investigation into revelations that people smugglers have posed as asylum seekers to gain entry into Australia.

An ABC Four Corners investigation, aired last night, also revealed that a people-smuggling kingpin passed himself off as a refugee in 2010, and now operates his business from a Canberra suburb.

Captain Emad, also known as Abu Khalid, captained an asylum boat from Indonesia, but then acted like an ordinary passenger when Australian authorities arrived.

He was taken into detention on Christmas Island and was given a protection visa and Australian residency on April 20, 2010, only three months after his boat arrived.

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Today Mr Bowen said he had ordered an investigation into the case, and into separate allegations that a people-smuggler's wife works for his department.

"That was a suggestion that was made in the media for the first time yesterday, and we will assess the veracity of that," he said.

And he said he had "no tolerance at all for people gaining refugee status based on false information".

"When we have somebody who has been granted refugee status, if it can be established that that status was based on wrong information then that can be revoked," he said.

"If somebody has gotten through that net is something that can be rectified and will be rectified."

But he said it was important to make sure the allegations were investigated "appropriately" and would not put a time frame on the process.

Emad and other smugglers passed ASIO security checks and went on to set up lucrative people smuggling deals in Australia.

He now lives just a few kilometres from the Australian Federal Police's headquarters in Canberra.

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Opposition immigration spokesman Scott Morrison says the Four Corners report highlights catastrophic intelligence failings.

"It's just quite shocking, frankly, that an ABC Four Corners crew have been able to uncover what the Government with its resources should have been able to track down," he told Lateline.

"This has all been happening under the Government's watch.

"We've had an end-to-end failure, apparently, from this program we've just seen tonight. I mean, end to end.

"We've got failures all the way through the border protection process, and we've known that for many years.

"And now we've got smugglers operating within our midst, on our own shores, and the Government apparently completely oblivious to it.

"I mean, it's a shocking report. Frankly it's not very surprising, because anything's believable under this government's failed policies in this area.

"But it is one that should be really gaining the attention, I would've thought, finally, of people within this Government to take some serious action."

The Government and Opposition have been locked in a political stalemate over how asylum seekers should be dealt with.

The Opposition says the revelations should prompt Labor to re-establish the Howard Government's border protection policies - including offshore processing at Nauru.

"They could open Nauru tomorrow - they have refused to do so," Opposition Leader Tony Abbott said.

"They could reintroduce Temporary Protection Visas tomorrow, they could give the Navy new orders tomorrow.

"They could do all of this, and they are arrogantly refusing to do it, because they don't want to admit that John Howard's policies were right."

But the Government remains committed to its Malaysian deal, which it says it designed to "break the people smugglers' business model".

Life in the suburbs

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Four Corners understands at least six agents on board the boat Captain Emad came to Australia on also received refugee status and were released from detention.

After arriving in Australia, Emad set up base in Canberra, where he has been working as a trolley collector at Gungahlin shopping centre.

His wife, three adult children and their dependents all got refugee status as well - using different names from those they used in transit in Malaysia and Indonesia.

Emad's wife lives in Kaleen, while his daughters live in Lyneham and Dunlop. His son lives in Hawker.

Sarah Alabbasi, the daughter living in Dunlop, says she has not seen her father for months and was shocked by the Four Corners report.

"I was shocked, I didn't know anything, I'm not sure if it's true or not but I'm not sure," she said.

The adults were all provided with public housing.

According to members of the family, they claimed their father had died in Iraq.

Greens Senator Sarah Hanson-Young says Emad's story should not distort the public's view of asylum seekers, who she says are "people who arrive here in desperation".

"They haven't been catching the big fish, they've been picking on the little fry," she said.

The Immigration Department says it takes all people smuggling allegations seriously but primarily it is a matter for the Australian Federal Police.

The AFP says it assesses all information about people smuggling on its merit and has arrested 14 alleged organisers since September 2008.

It released a statement saying "it would not be appropriate for the AFP to comment further on operational activity, intelligence and methodologies as it may jeopardise ongoing matters".

The revelations have sparked anger in Indonesia, with Tantowi Yahya, a member of the parliamentary committee on foreign affairs, saying it undermines Australia's claim to be fighting the smuggling trade.

"Our commitment is to find the mastermind who is behind all this," he said.

"And we agree with the request from Australian Government to be cooperative with them, but then we get the news that the Australian Government is giving refugee status to the smugglers."

This morning Foreign Minister Bob Carr urged the Opposition to back the offshore processing of asylum seekers in Malaysia to take the pressure off Indonesia.