A political row erupted in Australia yesterday over policies towards refugees as an investigation began into an explosion aboard an intercepted boat that killed three and injured dozens on Thursday.

Home Affairs Minister Bob Debus again refused to speculate on the cause of the explosion, amid suggestions from the Premier of Western Australia state that the refugees had doused the vessel in petrol.

"Of course it's possible, it's either an accident or it was deliberate, everybody can see that," Mr Debus said.

"The real question is to determine which was the actual situation, and we cannot do that until police have conducted an inquiry in the normal way."

The conservative opposition party blamed a softening in refugee policy for the latest illegal arrival, which was the sixth to be intercepted this year and the 13th since the centre-left Labour government rolled back tough measures against asylum seekers last September.

Prime Minister Kevin Rudd's Labour government, which came to power in late 2007, scrapped a widely criticised system under which asylum seekers, including children, were regularly held in detention centres for years.

Asylum seekers arriving by boat are now held on Australia's Christmas Island and their claims must be expedited, with six-monthly case reviews by an ombudsman now government policy.

Opposition Liberal party leader Malcolm Turnbull said the softer government stance provided a greater incentive to smugglers, putting people's lives at risk on the dangerous ocean journey to Australia.

But Mr Rudd was at pains to show that his government held a tough line on refugees, telling a news conference people smugglers were "scum of the earth".

"People smugglers are the vilest form of human life, they trade on the tragedy of others and that's why they should rot in jail and, in my own view, rot in hell," he said.

"That is why this government is absolutely committed to dedicating all resources necessary to ... maintain a hardline, tough and targeted strategy for maintaining this country's border protection."

Philip Ruddock, the former immigration minister who oversaw the previous government's tougher line, said boatpeople were often instructed to destroy their craft to prevent them being returned to their countries of origin.

"Putting cocktails into the engines that would disable them, disabling the vessel by knocking a hole in the hull were all matters ... undertaken and encouraged by smugglers to ensure people were taken rather than returned," remarked Mr Ruddock.

The explosion sank the boat around dawn on Thursday after it was intercepted by the navy near Ashmore Reef, about 600 km from the Australian mainland.