The Australian Government has acknowledged that New Zealand could deal direct with Papua New Guinea over taking some of the Manus Island refugees - and Australia could not block such a deal.
Australia's Immigration Minister Peter Dutton has opened the door to a possible resettlement deal between the two sovereign states - but he indicated Australia would not be pleased.
He warned any such deal would not have Australia's blessing and would risk souring the diplomatic relationship with his Government.
"That's an issue between those two countries. Any sovereign state can enter into bilateral arrangements," Dutton said in a Sky News interview on Thursday.
"They would have to think about other equities within the respective relationships - they would have to think about their relationship with Australia."
New Zealand has offered to resettle 150 refugees from Manus Island, where 370 men have refused to leave Australia's decommissioned regional processing centre.
The site has had no food, water or power supplies since October 31.
The humanitarian crisis has attracted widespread condemnation from the United Nations and human rights observers.
Prime Minister Jacinda Ardern has offered to take 150 refugees and has previously noted it was feasible to approach Papua New Guinea directly, but has so far elected not to.
Instead she has repeatedly reiterated New Zealand's resettlement offer to Australian Prime Minister Malcolm Turnbull.
Meanwhile, senior Cabinet minister Phil Twyford says the Labour-led Government's approach to the relationship with Australia is "much more robust" than that taken by the previous administration.
"The approach of the last government was very much don't rock the boat, don't raise anything uncomfortable - and as a result we got walked on time and time again," he said on Newshub's The AM Show on Friday.
"This is a much more robust approach based on a good relationship."
Twyford was reacting to National's Judith Collins' criticism of the way Prime Minister Jacinda Ardern went about discussing the Manus Island detainees with her Australian counterpart Malcolm Turnbull in recent days.
"It was a bit unfortunate for the prime minister to go charging in like she did and try to embarrass the Australians," she said on the same show.
"This is a very complex issue... they don't want help on this, they think they are a country that can make its own decisions and they don't want us on it - we should just sit back and wait."
- Additional reporting: NZN