The Australian government said stopping a group of Chinese asylum seekers setting sail for New Zealand is not covered by its legal authority.

Prime Minister Julia Gillard insisted yesterday that after granting temporary visas to 10 Chinese nationals on board a yacht, the government cannot prevent the asylum seekers from going to New Zealand as they had not sought asylum in Australia in a bid to skip detention which is mandatory in Australia, but not in New Zealand.

The temporary visas were acquired by the Chinese nationals to be able to stock up on food and other supplies for their journey. They were reportedly guided in their sail by only a hand-held GPS. The 10 included several children, according to Fairfax NZ News.

"We are not in a position where we could detain them against their will," Ms Gillard told the media.

Fairfax reported the Chinese group apparently set sail from Malaysia last month. Their yacht was escorted into port at Darwin last week to repair mechanical problems.

Refugee Council spokesman Gary Poole noted some reports implied the group had already received refugee status in Malaysia, and if this is the case, "they don't have a leg to stand on in relation to seeking protection in either Australia or New Zealand."

"It's interesting that our Government has been pretty silent on this. It puts our country really in a difficult situation. If these people are just trying to exploit the system then it would be most unfortunate," he added.

The group belonged to Falun Gong, whose members have been arbitrarily detained in China. They have been outlawed since it staged a gathering in Tiananmen Square in 1999.