120 rescued after asylum boat sinks

Rescuers are attempting to reach the scene of the second asylum boat disaster in a week. Photo / Thinkstock

More than 120 asylum seekers have been rescued after their boat sank en route to Australia, Prime Minister Julia Gillard says.

Ms Gillard says between 123 and 133 people were believed to be on board the boat when it got into distress 107 nautical miles north of Christmas Island. At least one person is reported to have died.

"As we speak, my best advice is 123 people have been rescued,'' she told federal parliament on Wednesday.

The incident comes just a week after an estimated 90 people died when their overcrowded vessel capsized between Indonesia and Christmas Island.

Ms Gillard said it was still unclear whether or not anyone from the boat was unaccounted for.

"Standing here in the parliament now, I simply don't know," she said.

The navy's HMAS Maitland and three merchant vessels are now at the scene. An airforce P3 Orion plane is assisting the rescuers.

HMAS Leeuwin is also on its way and expected to arrive by 4pm AEST.

The Australian Maritime Safety Authority (AMSA) is co-ordinating the effort, even though the boat went down in Indonesia's search and rescue area.

The asylum seeker boat's crew used a satellite phone to issue a distress call to the Australian Federal Police at 6.17am and the first merchant vessel arrived on the scene about 10.30am.

Ms Gillard says there was no one in the water when the first merchant vessels arrived.

But the boat subsequently started sinking and people went into the sea, prompting the crew of a merchant vessel to deploy life rafts.

An AMSA spokesperson said the sea conditions were "fair, but not ideal".

Australia has notified Indonesia's BASARNAS rescue organisation, but it is not yet clear whether it will assist with the rescue effort.

Coming just a week after an overcrowded boat capsized en route to Australia, leaving 90 people dead, the latest incident has ignited a political storm in Canberra.

After 2pm, Ms Gillard brought on a parliamentary debate about independent MP Rob Oakeshott's private members bill which seeks to break a longstanding impasse between the two major parties and restore offshore processing of asylum seekers.

It would allow the government to proceed with its controversial Malaysia people-swap deal, which is opposed by the coalition.

"I believe the time for the party divide on this issue is at an end," Ms Gillard said.

"We have seen too much tragedy."

Opposition Leader Tony Abbott asked the government to give the opposition more time to consider its position.

Ms Gillard denied the request, saying the matter required urgent action.

"I believe the eyes of the nation are upon us, given this second incident with an asylum seeker vessel, and nothing is to be gained by delay," she said.

- AAP