The Australian Navy rescued on Thursday 211 asylum seekers on Christmas Island. The vessel crew initially contacted the Australian Maritime Safety Authority on late Wednesday night due to engine problem.

The people on board the boat, whose country of origin is yet to be established, were picked up by HMAS Larrakia and HMAS Ararat. The Immigration Department said it will process the asylum seekers on Friday.

The latest incident of rescue highlights the growing problem of asylum seekers amid failure of the Gillard government and the Coalition on how to deal with the problem. The Opposition said the latest incident showed that Prime Minister Julia Gillard needs to admit failure of the current asylum-seeker policy of her administration.

"This latest arrival is the largest illegal boat to have arrived on Labor's watch since they abolished the Howard government's proven border protection measures," Opposition immigration spokesman Scott Morrison said in a statement.

"It is only Julia Gillard who stands in the way of the Coalition's proven measures being restores. She doesn't need a committee, she does need to swallow her pride and make a decision," Mr Morrison added.

The Thursday batch adds to the 100 asylum-seekers boats ferrying 7,000 people that have sought to enter Australia illegally in 2012. Reports said the groups behind the smuggling of people instruct the boat crew to make fake distress calls to have naval assistance after leaving Indonesia.

The distress calls, however, have placed a strain on naval resources which has only 14 patrol boats, one of which is no longer allowed to operate and two with structural crack which limited the vessel's ability to up to 2.5 metre swells only.

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