Labor says the government must come clean on payments to people smugglers to restore relations with Indonesia.
Indonesia's foreign affairs ministry claims to have evidence Australian officials paid $30,000 to five crew members to turn their boat around, but says it is yet to receive any clarification about this.
Opposition foreign affairs spokeswoman Tanya Plibersek says Prime Minister Tony Abbott owes a full explanation to Indonesia and the Australian people.
"We have seen the foreign minister and the immigration minister flat out deny it and then the prime minister seems to indicate that this may have happened," she said in Sydney.
"It is absolutely vital that the prime minister does what he has to do to get this relationship back on track."
Earlier this week, Mr Abbott said he was absolutely confident Australian agencies had acted within the law at all times.
Indonesian vice-president Jusuf Kalla has also said if Australia paid people smugglers to return asylum seekers to his country, that would amount to bribery and possibly even people-trafficking.
The Australian Federal Police and the auditor-general are assessing the claim.
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