Deal close but recent arrivals stranded

Refugee advocates are demanding more than 500 boat people on Christmas Island be processed in Australia immediately instead of deported as the Gillard Government promised.

As Immigration Minister Chris Bowen prepares to sign the controversial refugee swap deal with Malaysia, Kuala Lumpur has made clear those people who have arrived on 10 boats since the arrangement was announced on May 7 will not be included in the quota.

Under the deal expected to be unveiled on Monday, Australia will deport 800 boat people to Malaysia in return for resettling 4000 genuine refugees over four years.

Taxpayers are expected to meet the $300 million healthcare and education costs in Malaysia for the 800 and their eventual resettlement in a third country.

The United Nations High Commissioner for Refugees will endorse the deal, despite Malaysia not being a signatory to the UN refugee convention.

Its approval has been crucial for Labor's Left faction to accept the plan to send boat people directly to a third country without processing their claims here.

But once the deal is done, the Gillard Government will need to turn its attention to the 500 new arrivals on Christmas Island, who have not had their asylum claims processed and have been slated for transfer to a third country.

Talks with the only other country Australia is hoping to deport boat people to, Papua New Guinea, have stalled because of political instability in Port Moresby.

UNHCR regional representative Richard Towle said the 500 needed to be processed in Australia without delay.