Australian MPs are debating a bill to reopen offshore asylum centres, after experts recommended the plan amid deadlock between the governing Labor Party and the opposition.
Experts said Australia should set up processing centres in Nauru and Papua New Guinea.
Labor closed a centre on Nauru in 2008, ending years of bitter controversy over the so-called Pacific Solution.
Meanwhile, 67 asylum seekers are reported to be missing at sea.
Australian customs officials are investigating reports that a boat has gone missing after leaving Indonesia bound for Australia.
There were ''very grave fears'' over the fate of the people, Home Affairs Minister Jason Clare said. "Unfortunately we have not found any evidence that those people have arrived in Australia."
Some 600 asylum seekers are believed to have died making the dangerous journey by boat to Australia since late 2009, Australian media report.
'Interested in action'
In a report released on Monday, an independent panel said two offshore facilities should be reopened ''as soon as possible'' as part of a series of measures aimed at reducing the number of people travelling to Australia by boat.
The panel was appointed by Prime Minister Julia Gillard in June after the two main parties failed to agree on measures to tackle the rising number of boat people.
Ms Gillard - whose party had argued against the establishment of such centres - said her cabinet accepted the panel's recommendations and was seeking a deal in parliament.
She said she hoped to see asylum seekers processed offshore "within a month", saying she had already spoken to leaders in PNG and Nauru.
When the Labor government under Kevin Rudd came to power in 2007, it ended the Pacific Solution.
The controversial policy was introduced in 2001 by the government of John Howard, in response to a reported rise in the number of asylum seekers arriving by boat.
Processing centres were set up on Nauru and on Manus Island in Papua New Guinea, the governments of the two nations receiving millions of dollars in aid in exchange.
The Australian navy diverted all boats carrying asylum seekers to those camps, where many were detained for months - sometimes years - under high security.
Some went on hunger strike to protest against their living conditions and continued detention.
Many Australians did support the policy but rights groups condemned it and accused Australia of failing to meet its obligations under refugee conventions.
Ms Gillard had been pushing instead for the "Malaysia swap" deal, under which Australia would send 800 asylum seekers who arrived by boat to Malaysia and receive 4,000 refugees in return over four years.
Last year a court ruled against such a move, saying Malaysia - which has not signed UN refugee conventions - did not offer adequate protection.
In its report the panel, headed by former defence chief Angus Houston, called for the Malaysia agreement to be built on, rather than being discarded or neglected - but the opposition says it will not support such a plan.
Asked in parliament why her position had changed on Nauru, Ms Gillard said: "I don't think that the Australian people are interested in who said what, they're interested in action. They're interested in change."
Opposition leader Tony Abbott - whose party also wants asylum boats to be turned around - said he welcomed legislation for offshore processing.
"The prime minister has finally, finally, finally seen the sense of what the opposition has been proposing all along," he said in parliament.
The Greens, meanwhile, have called for caps on the length of time asylum seekers can be detained.
Human rights group Amnesty International says the government has sacrificed the rights of asylum seekers for political gain.
""This announcement sends a resounding message to the region that protecting refugee rights is something to be avoided at all costs," spokesman Graham Thom said in a statement.
"The tragedy of asylum seeker deaths at sea must be addressed, but not by punishing people who have already fled torture and persecution."