New Zealand has a reputation as a "soft touch" for refugees and has previously been the target of boatloads of asylum seekers, Cabinet papers say.
"New Zealand is at risk of experiencing a mass arrival," says a paper dated August 2010, released under the Official Information Act.
"We know this because [withheld] and some boats are already known to have previously targeted New Zealand.
"There may be a perception offshore among potential illegal migrants that New Zealand is a 'soft touch'."
The paper, which has had most of the details blacked out, outlines options for the Government's new strategy for dealing with a mass arrival of asylum seekers.
In July 2010, when the Government was developing its strategy, Prime Minister John Key turned asylum-seeking into an issue by saying New Zealand would inevitably become a target.
When a boat of Sri Lankan refugees was intercepted in Indonesia in July last year, Mr Key said bluntly that they were "not welcome" and had no chance of being granted refugee status or asylum in New Zealand.
But advice in officials' papers reveal that under international obligations, New Zealand cannot deport people who are at risk of persecution, arbitrary deprivation of life, cruel treatment or torture in their home country.
The paper said people smuggling was a "serious international crime that jeopardises human lives and threatens New Zealand's security".
A successful arrival on New Zealand's shores and a good outcome for asylum seekers could open the floodgates, the Cabinet paper warns.
The Government's response centres on deterrence and prevention, "ensuring people are deterred from using people-smuggling services by making New Zealand an unattractive destination".
It notes that not all boats would be deterred by the cost and challenges of reaching such an isolated country.
"For example, 76 Sri Lankan asylum seekers arrived in Canadian waters aboard the Ocean Lady in October 2009."
More than 100 vessels with 6000 passengers arrived in Australia in 2010, and two vessels - one carrying 500 people - arrived in Canada in 2010.
Strong legislation and a signal to fully investigate all cases was one aspect of deterrence. Smuggling and trafficking offences have maximum penalties of 20 years' jail or a $500,000 fine, or both.
In 2004, a man who tried to smuggle three people from Ukraine to New Zealand was sentenced to 3 years' jail; in 2006, a man was sentenced to 4 years' jail for smuggling seven Indonesians.
New Zealand accepts up to 750 refugees a year, and about 300 people claim asylum every year, most of whom arrive legally and lodge a claim because of changing circumstances in their home countries.
About 30 people arrive and claim asylum at the border.
People smuggling is also a heated political issue in Australia, and New Zealand and Australia are lead players in the Bali Process, which started in 2002 and seeks a regional solution to the problem.