Asylum seekers intercepted on unseaworthy boats could be bundled on to lifeboats and turned back to Indonesia by the Australian navy.
Jakarta warned Australia again yesterday not to turn boats back - saying doing so could reignite simmering diplomatic tensions.
The West Australian has been told the Government has explored buying industrial-sized lifeboats similar to those used on oil tankers.
The rigid-hulled boats would be powered, durable and able to carry dozens of passengers. Often asylum seekers boats are in a poor state, making it impossible for the navy to turn them back.
It is understood border protection officials tested the idea of transferring asylum seekers to the new lifeboats, stocked with food, fuel, lifejackets and communications equipment, then ushering the boat back to Indonesia.
Immigration Minister Scott Morrison refused to comment.
"People smugglers have used official commentary on such matters to make dangerous assumptions about our maritime operations, which puts people at risk," he said.
Authorities in Jakarta claimed yesterday the Australian navy had turned an asylum seeker boat back to Indonesia.
Indonesian police said they had found 45 asylum seekers adrift aboard a boat near Rote Island.
Those aboard claimed to have been given lifejackets and communications equipment by personnel on an Australian navy vessel and ordered back to Indonesia. The boat could be the first to be turned back since the Abbott Government took over. Mr Morrison refused to be drawn, saying only Australia "respected Indonesia's territorial sovereignty".
Relations with Indonesia have been on edge since it was revealed last year that Australian spies targeted the mobile phone of the Indonesian President and his wife.
Speaking in Jakarta, Indonesian Foreign Affairs Minister Marty Natalegawa warned his country would not tolerate boat turn-backs.