Immigration Minister Tony Burke has confirmed refugees resettled on Nauru will not have the option of becoming permanent residents there.
The opposition and the Australian Greens seized on a report in which Nauru appears to cast doubt on the resettlement deal Prime Minister Kevin Rudd signed with his Nauru counterpart on Saturday.
Under the deal, similar to Labor's hardline agreement with Papua New Guinea, asylum seekers who arrive in Australia by boat will be processed in Nauru and those found to be genuine refugees may be resettled there.
But a spokeswoman for Nauru has told Fairfax Media that none of the asylum seekers will get citizenship or be considered permanent residents.
"These people are coming here and they will be staying here and in transit," Nauru's official spokeswoman, Joanna Olsen told Fairfax.
"It is not permanent settlement. It is considered long-term stay. It is still temporary in the government's view and they will eventually be moved on."
Immigration Minister Tony Burke insists there will be a "limited number of people" who will be settled on Nauru.
"It won't be massive numbers," he told ABC radio on Monday. "It can't be massive numbers - we're talking a very small country."
But he conceded that Nauru does not offer permanent residency visas.
"The experience of Nauru has been that when people are given a chance to settle, they tend to not remain permanently," he said.
Opposition immigration spokesman Scott Morrison said Mr Rudd's deal had unravelled already.
"This is a government that's great on big announcements but when it comes to the practical implementation of policies on border protection it all falls apart," Mr Morrison told AAP.
Nauru's comments also cast fresh doubt on the PNG deal, he said.
"The unravelling of Nauru just underscores the reality that there is no compulsion on Papua New Guinea to resettle everybody who is sent there," he said.
Greens leader Christine Milne said "the wheels have fallen off" Labor's Nauru plan.
Sending asylum seekers to a "21-square kilometre rock" that did not produce its own food and had insecure water supplies was "absurd", she said.
