An angry Malcolm Turnbull has asked CEDA for a “please explain” and the Australian Federal Police (AFP) for a full incident report about the protest over Nauru and Manus Island that overshadowed his economic speech on Wednesday.

Turnbull wants to know from CEDA, which hosted the widely previewed address, how the group of demonstrators was allowed to get into the lunch, held at the Grand Hyatt in Melbourne. The AFP has been told to provide its report on the security breach by Thursday morning.

Some of the demonstrators paid for their seats while others went in with the media. A protestor said later those who posed as media representatives gave false names.

One woman reached the stage, where she stood, metres from Turnbull, holding a placard that read “FFS CLOSE THE BLOODY CAMPS”. It was not police but CEDA chief executive Stephen Martin who escorted her away. Protesters shouted: “Malcolm Turnbull, shame on you, shut down Manus and Nauru”. Turnbull was forced to stop his speech until order was restored.

Meanwhile, after a meeting on Wednesday in Port Moresby, Immigration Minister Peter Dutton and Papua New Guinea Prime Minister Peter O'Neill agreed the Manus Island detention centre will close, but gave no timetable and left unclear the fate of some 854 men who are there.

Talks between the two governments have been underway since the PNG Supreme Court in April ruled that the detention of asylum seekers was illegal.

O'Neill said at the time the centre would be closed, although Australia initially appeared reluctant to accept it would come to that. Now Dutton is embracing the prospect of closure as a joint achievement, saying “we have determined that we can do without the capacity that was once needed on Manus Island”.

O'Neill said he was satisfied officials from the two countries were making progress and further announcements would be made “in due course”. Both countries “are in agreement that the centre is to be closed”, and options were being “advanced and implemented”. But “it is important that this process is not rushed”.

Dutton reaffirmed Australia would take none of the men. “Our position, confirmed again today with PNG, is that no-one from Manus Island Regional Processing Centre will ever be settled in Australia,” he said. The options were for people to settle in PNG or return to their home countries.

He said there was no third country available at the moment although Australia was continuing to work on that. But he stressed that any third-country settlement would have to be done in such a way that it did not allow the boats to start again. The government believes that sending people to New Zealand, for instance, would be an inducement for the boat trade to restart.

When parliament resumes, the government faces the prospect of the Senate setting up an inquiry into the situation on Nauru, following Guardian Australia’s publication of more than 2100 incident reports from within the processing centre there.