Federal Labor believes paying people smugglers to turn around their boats is akin to giving murderers and drug dealers money not to commit crimes.
The opposition on Thursday upped the ante as it continued to press the government for an explanation about claims Australian spies paid $US30,000 to six crew members of two asylum seeker boats intercepted by authorities in late May.
But it wasn't helped by former Labor prime minister Julia Gillard who refused to say whether her government had ever paid cash to people smugglers to gather intelligence.
Opposition immigration spokesman Richard Marles acknowledged that intelligence agencies and police around the world paid informants to infiltrate criminal networks.
But that practice was very different to paying for what he described as "reverse people smuggling".
"The allegation that we have is the equivalent of paying drug dealers not to make ice ... murderers to not go out and murder," he told reporters in Canberra on Thursday.
Ms Gillard, appearing on BBC TV, said that during her time as prime minister "absolutely we worked to try and prevent people smuggling".
Asked whether she believed it was acceptable for Australia to be paying people smugglers, she declined to answer.
"I'm not going to be drawn into today's political debate about a policy of the Abbott government," she said.
Shadow attorney-general Mark Dreyfus said it would be surprising if Australian intelligence agencies and federal police working in other countries were not on occasions paying for information.
"If there's payments to be made to disrupt people smuggling syndicates that might also be something that you might imagine ... also takes place," he said.
But allegations of payments on water "crosses the line" and might be a crime under Australian, if not Indonesian law.
Human rights group Amnesty International said Australia could have breached a range of binding international legal obligations.
It called on the government as a matter of urgency to immediately launch an independent inquiry.
Immigration Minister Peter Dutton said the government had been able to stop the boats within the law and its international obligations.
People smugglers seeking to put people on boats and risking deaths at sea was not a situation the government would tolerate, he told reporters.
