Opposition immigration spokesman Scott Morrison says Prime Minister Julia Gillard and Immigration Minister Chris Bowen should resign over the government's failed Malaysian people swap deal.
He urged Labor to call an election immediately.
The government hoped to secure passage of legislation resurrecting the Malaysia deal through the lower house this morning.
But key crossbench MP Tony Crook announced he wouldn't support the bill, meaning the government didn't have the numbers in the lower house to pass it.
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The government will continue to press Coalition leader Tony Abbott to support its amendment to the migration laws, the PM said.
Mr Morrison said the Rudd government created the problem three and a half years ago by abolishing the Howard government's Pacific Solution.
