A ramshackle fishing boat carrying 66 suspected asylum seekers from Sri Lanka has arrived in Australia - carrying passengers holding a sign saying "We want to go to New Zealand".
The overcrowded wooden fishing vessel carrying men, women and children was spotted off the coast of Geraldton, about 400km north of Perth in Western Australia.
It is believed to be the first boat to have travelled so far south in recent years. Most asylum seekers arrive near Christmas Island, more than 2000km north, where they are usually intercepted.
A spokesman for Immigration Minister Michael Woodhouse said New Zealand Customs had been in discussion with Customs in Australia over the asylum-seekers.
The outcome depended on whether the asylum seekers asked for asylum in Australia, he said.
The spokesman said they could not ask for asylum in New Zealand while in Australia.
The situation was a reflection of the "bad decision" made by Mr Key to enter the agreement with Australia, said Refugee Council of New Zealand spokesman Gary Poole.
"This is precisely what we predicted. Unfortunately what our government has done is they've actually fed into the whole problem in Australia."
No boat has ever made it to New Zealand and it was unlikely to because of "treacherous" conditions in the Tasman Sea.
"But what it's done, it's now acting as a magnet, the particular policy, because he's now accepting 150 out of their camps. We've become part of Australia's problem," said Mr Poole.
New Zealand is part of the United Nations convention, so if a boat made it here, the Government would be obliged to process the cases and determine if those aboard were genuine refugees.
The group that arrived in Australia, believed to have travelled for more than 40 days from Sri Lanka, would have endured hazardous waters and conditions that endangered their lives, Mr Poole said.
"They would have been low on food, there would have been potential medical problems - they're taking huge risks."
The boat was spotted by two local men testing the motor of a dinghy about 500m offshore.
It was met by customs and police officers about 12pm yesterday and towed into harbour.
Photographs show a group of passengers holding a sign with the words: "We want to go to New Zealand. Please help us".
A New Zealand flag was flying on the boat.
The passengers included four babies and a pregnant woman.
Scott Ranch, manager of the Dome cafe where patrons sat and watched in amazement, said at first he thought the boat was a prank.
"We thought it was a hoax or a publicity stunt, but then we saw the customs towing it away," Mr Ranch said.
Australia Home Affairs Minister Jason Clare said a temporary screening centre had been set up to process the arrivals.
Immigration officials plan to send them to Christmas Island.
"A team of processing staff supplemented by contracted health and detention service providers is expected to arrive in Geraldton shortly," a statement from the immigration department says.
Once there, immigration officials will formally detain the group and make arrangements "as soon as possible" for their transfer to detention facilities on Christmas Island.
Geraldton mayor Ian Carpenter told Radio New Zealand it was rare to see asylum seekers in that part of Australia, and he wondered how the boat could have travelled so far south without being detected.
"We're certainly surprised because, as you would know, in most cases these vessels come ashore up around Ashmore Reef or Broome - in that general area. We're some 2000km south of them, so it is surprising," he said.
ABC News reporter Nick Dole agreed.
"Yes, it's highly unusual. It's been several years since any asylum seekers have made it to the mainland," he told RNZ.
A "steady flow" of asylum seekers are intercepted by authorities every year. It is not yet clear if they got lost while trying to get to New Zealand.
The men from the boat were being taken to a separate detention centre from the women and children, before the group are all processed on Christmas Island where they will receive health and security checks.
If found to be credible asylum seekers, they will be given a visa for Australia.
In February John Key and Australian Prime Minister Julia Gillard announced a deal for New Zealand to take 150 refugees from Australia each year from its annual quota of 20,000.
Mr Key said the deal was at no extra cost to New Zealand because the 150 will come out of the country's existing annual 750 refugee quota.
It would also give New Zealand access to Australian intelligence and other resources to disrupt and intercept people-smuggling, Mr Key said at the time.
Mr Key said Australia was receptive to processing any mass arrival to New Zealand in its offshore centres in Nauru and Papua New Guinea, all in exchange for accepting the 150 Australian-approved refugees.
Immigration Minister Michael Woodhouse was this morning being briefed on the arrival of the suspected asylum seekers in Australia.
It is unclear whether they could be the first to be processed in New Zealand under the new agreement with Australia, if they are granted refugee status.
Under existing legislation, asylum seekers who reach the mainland will avoid being sent to processing centres on Nauru or Manus Island in Papua New Guinea.
The Australian government is seeking to change this, with legislation currently before the Senate.
- Staff reporter and AAP