Acting Prime Minister Wayne Swan has agreed to the Coalition's wish that asylum seekers apprehended on Australian waters be processed instead on Nauru but stopped short of offering protection visas that the Liberals have been demanding as a compromise.

In a letter sent on Friday to Opposition Leader Tony Abbott, Swan said the compromise calls for the Coalition to support too the Labor Party's Malaysian Plan, which will allow the federal government to send refugees to Malaysia for processing.

In exchange, Canberra will have to absorb some 4000 refugees that Kuala Lumpur will send.

Swan underscored too that he firmly believes that the Nauru solution is not the answer to the contentious issue of how to effectively deal with the streams of boat people trying to reach the Australian shores.

Yet he admitted in his letter that "it is apparent that if this impasse continues, people will continue to undertake dangerous boat journeys."

Swan stressed that in accepting the Nauru proposal being pushed by Abbott, he expects the Opposition Leader to support the Malaysian component contained in Labor's plan of offshore processing.

That position was reiterated by Immigration Minister Chris Bowen, who made clear that a deal between the two parties must involve the Malaysian solution earlier proposed by Prime Minister Julia Gillard.

"'We are happy to engage with the government of Nauru to see if a processing centre can be developed on Nauru. We do this for one simple reason - in the spirit of compromise," Bowen told the Sydney Morning Herald.

He also stressed that the Labor-led government is not inclined to issue any temporary protection visas for refugees and insisted that if on that basis the Coalition will reject the government's overture, Abbott was more focused on politics than on addressing the issue.

Abbot's office, however, has indicated that once Swan's letter is received, it is likely that a meeting will be arranged.

But his representative has asserted that all components outlined on its previous proposal must be accepted by the government.

"The government should reopen Nauru straight away and if they do that, along with temporary protection visas and turning the boats back, there is absolutely no need for Malaysia," SMH quoted Abbott's statement on its report.

The latest government move, however, earned criticism from Refugee Council chief executive Paul Power, who said that the compromise was "costly, unsustainable and wrong as a matter of principle."

Also, the Australian Green Party did not hide its displeasure on what it called as a Labor turnaround that would revive measures that Ms Gillard had already disavowed.

"This is a very sad moment for people who wanted their government to stand firm and treat asylum seekers humanely and offer them durable options for safety," the Greens' Sarah Hanson-Young told SMH.