Indonesian officials fear the people smuggling trade could boom amid allegations Australia is offering cash sweeteners to entice boat crews to turn back home, a senior foreign ministry official warns.
Australian officials boarded a boat carrying 65 people from Bangladesh, Sri Lanka and Myanmar, bound for New Zealand late in June.
The boat was turned around and sent back to the Indonesian island of Rote, where the local police chief alleges the six crew members received $US5,000 ($A6,447) each from Australian customs officials.
Indonesian foreign ministry information director general Esti Andayani said the allegations were worrying.
"We are concerned it will inspire people to do it (take asylum seekers on boats) because they'll get money," she told AAP in Bandung.
Indonesian authorities are investigating the matter.
The Australian government has refused to comment on the allegations.
The asylum seekers, including women and children who are being housed in a small hotel in the eastern Indonesian city of Kupang, have corroborated the account given by the crew.
Local police chief Hidayat, who like many Indonesians goes by one name, said an Australian police officer and a New Zealand police officer spoke with the boat people in Kupang on Wednesday, and planned to interview the captain and crew on the island of Rote.
They were expected to travel to the point where the boat was intercepted to determine whether it was in Australian or international waters, he added.
Prime Minister Tony Abbott repeatedly refused to confirm whether Australia was investigating the claims.
But the government would do "whatever it takes" to stop people smugglers.
"What we do is we stop the boats by hook or by crook," he told Radio 3AW on Friday.
Mr Abbott said he was proud of the work of Australia's border protection agencies, who had been "incredibly creative" in coming up with ways to stop the trade.
* The reporter travelled to Indonesia as part of the Ministry of Foreign Affairs journalists visits program
