Indonesia demands answers from Australia on asylum boat 'payment'

Indonesia's foreign minister Saturday demanded answers from Canberra over claims Australian officials paid thousands of dollars to turn a boat back to Indonesia after Prime Minister Tony Abbott refused to deny the allegations.

Foreign Minister Retno Marsudi said Indonesia would be "really concerned" if it was confirmed that the captain and five crew of a boat carrying asylum-seekers were each paid US$5,000 by an Australian immigration official to return to the Southeast Asian nation.

The claims were made to local police on Rote island in eastern Indonesia, where the boat carrying 65 asylum-seekers came ashore late May after being intercepted by the Australian navy.

Marsudi said that she had raised the issue on the sidelines of a conference in Jakarta with Australia's ambassador to Indonesia, Paul Grigson.

"I just asked him 'What is it about, tell me, what is it?'," she told reporters at the event.

"He promised to take my question, my inquiry, to Canberra and he promised to get back to me again."

"We are really concerned if it is confirmed," she added.

The escalating row risks further damaging relations between Australia and its northern neighbour, which are already tense after Indonesia executed two Australian drug smugglers by firing squad in April.

Indonesian authorities have launched an investigation into the alleged payments to the crew of the boat carrying asylum-seekers from Bangladesh, Myanmar and Sri Lanka, which was intercepted en route to New Zealand.

Abbott on Friday said Australia would do "whatever we need" to combat people-smuggling -- but repeatedly refused to deny that a payment was made.

"By hook or by crook, we are going to stop the trade," he said. "We have stopped the trade and we will do what we have to do to ensure that it stays stopped."

Canberra has embarked on a tough immigration policy since Abbott's conservative coalition came into power in September 2013 and refuses to accept asylum-seekers arriving by boats.

The policy includes military-led efforts to turn back such boats, which mostly come from Indonesia, and sending asylum-seekers to camps on the Pacific island outpost of Nauru and Papua New Guinea for resettlement despite strong criticism from human rights groups.

Australia has also signed a deal with impoverished Cambodia to accept unwanted refugees in return for millions of dollars in aid over the next four years.

Abbott and his ministers insist the hardline policy has saved the lives of asylum-seekers.

Only one boat with asylum-seekers has reached the Australian mainland since December 2013. Before the policy was introduced, boats were arriving almost daily with hundreds of people drowning en route.