The Prime Minister of Australia, Kevin Rudd, struck a deal with a small pacific island state in a drive to implement his hardline policy on immigration.

The deal, agreed tday, wilol send asylum seekers who arrive in Australia by boat to a processing centre on the island of Nauru.

The new arrivals can opt for resettlement after their claims for refugee status are processed on Nauru.

Genuine refugees arriving by boat will also be denied the option of being resettled in Australia.

In return, Nauru will get just under 30 million Australian dollars in aid.

A similar agreement was signed with impoverished Papua New Guinea.

Mr Rudd said:

"No matter where people smugglers try to land asylum seekers by boat in Australia they will not be settled in Australia. This is our core principle, this is our core unshakeable position, that if people smugglers try and bring asylum seekers to Australia by boat those people will not be settled in Australia."

Phosphate mining for almost a century on Nauru has turned the 21-square-kilometre island into a wasteland.

A riot broke out between asylum seekers and guards at a Nauru holding centre last month and facilities burned down.

With elections just around the corner Mr Rudd's get-tough policy on asylum seekers is seen as a vote winner in poorer districts where immigrant numbers are high.

But critics are questioning the ability of impoverished nations such as Nauru to provide adequate and humane processing facilities.