Prime Minister Julia Gillard wants to set up a processing hub in East Timor that would take any unauthorised boat arrivals that make it to Australia.
But she has come under fire for failing to discuss the idea with East Timor Prime Minister Xanana Gusmao before announcing the policy.
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Foreign Minister Stephen Smith says it was released in an "entirely appropriate manner", noting Ms Gillard had spoken to President Ramos Horta about it.
"He is a person who is integral to the operations of East Timor," Mr Smith told ABC Television, adding that he has since spoken to Prime Minister Gusmao.
"And the end result of that conversation was prime minister Gusmao saying he wanted President Ramos Horta to take charge of discussions."
"People who expect you can announce it with a bow-tie on top, or announce it on day one, frankly don't appreciate the reality of a very difficult issue."
Mr Smith says he has also spoken with East Timor's foreign minister Zacarias da Costa about the plan.
"We have decided in the first instance our officials would deal with it and then he and I will have a further conversation... to progress the matter."
"We will be sending officials to East Timor in the course of this week to start a detailed discussion."
He also clarified that at this stage East Timor is the only country Australia has approached to host a regional processing centre.
"We haven't opened up, and are not proposing to open up a conversation with another country."
