THE Gillard government has settled its refugee swap deal with Malaysia, with the documents to be signed on Monday.
It is expected that the Immigration Minister, Chris Bowen, will formalise the agreement with Malaysia's Home Affairs Minister, Hishammuddin Hussein, in Kuala Lumpur, witnessed by representatives of the Office of the United Nations High Commissioner for Refugees and the International Organisation for Migration.
It is hoped the deal will deter people smugglers from targeting Australia.
However a boat carrying 62 asylum seekers was intercepted last night, just 24 hours after another vessel containing 52 people was detected in Australian waters. Mr Bowen had previously said boat arrivals to Christmas Island had fallen markedly since the Malaysia plan was announced in May.
Last night Mr Bowen's office refused to confirm that the deal would be signed on Monday.
Sources said the refugee agencies would not be signatories to the document, which is an agreement between Australia and Malaysia, but had agreed it would operate in parallel with their policies for protection of refugees and side arrangements with Australia.
The UNHCR's endorsement is crucial because the agency will be responsible for processing and resettling the 800 asylum seekers sent to Malaysia.
But its approval has been hard won; its head office in Geneva pushed for the deal to include human rights guarantees and rejected several earlier drafts. The UN commissioner, Antonio Guterres, was bombarded with hundreds of emails from Australians protesting against the deal.
Approval from the UNHCR is critical for the Gillard government to have the refugee exchange accepted by Labor's Left faction, which was concerned that unaccompanied children would be sent to Malaysia.
The UNHCR has welcomed Australia's agreement to resettle 4000 refugees from Malaysia but had been cautious about a deal that also sent 800 boat arrivals from Australia to a country which is not a signatory to the UN's refugee convention.
About 95,000 refugees in Malaysia have no legal right to work, are at risk of arrest, have no access to government schools and healthcare, and must wait years for resettlement in other countries.
Australia has committed $292 million to the deal, which will include covering all the UNHCR's costs in ensuring the healthcare, education and eventual resettlement in third countries of the 800, who will receive identity documents stating they are not illegal migrants.
Underpinning the breakthrough after more than two months of negotiations, the head of the Malaysian police and the chairman of Malaysia's Human Rights Commission are expected to attend the signing ceremony.
More than 400 asylum seekers who have arrived at Christmas Island since May are not expected to be included in the swap, with Malaysia accepting only those arriving after the signing.
This puts pressure on the government to strike a deal with Papua New Guinea to accept those in limbo because it has said they will not be processed in Australia. But the Foreign Affairs Minister, Kevin Rudd, warned yesterday that the government must be cautious about rushing into a deal with PNG.
Speaking at a regional security conference in Bali, he said negotiations with Papua New Guinea depended on how the country's present political crisis unfolded.
''Given the political circumstances in Port Moresby at the moment and the possibility of a transition to new political leadership in Port Moresby, we have to be cautious with how we proceed,'' he said.
The PNG government has been in crisis over recent months because of a series of corruption allegations against the former prime minister Michael Somare and then his sudden retirement because of poor health.
The acting Prime Minister, Sam Abal, was also temporarily suspended yesterday as a result of a factional dispute in his National Alliance party.
Mr Rudd pledged to assist personally with the negotiations between now and when he has heart surgery on August 1.
He was expecting to meet the PNG Foreign Minister on the sidelines of the Bali meeting.
''What I have indicated for a long period of time is that as political circumstances on Port Moresby clarify, that I will engage in appropriate discussion with PNG authorities as to what might be possible there,'' Mr Rudd said.
Meanwhile, tensions at the Christmas Island detention centre remained high yesterday, with another riot breaking out. Earlier this week Australian Federal Police week used tear-gas and bean-bag bullets against detainees.
Mr Bowen said there had been a 69 per cent fall in the number of people being held at Christmas Island.