Dozens of people rescued after a boat sank were transferred to Christmas Island, amid fierce debate on the issue of asylum in the Australian parliament.

A bill that would allow offshore processing of asylum seekers was passed in the lower house yesterday.

This is now being debated in the upper house, but is considered unlikely to survive the vote.

Australian officials said 130 people were rescued from boat - the second to sink in the area a week.

The Australian Maritime Safety Authority said that 130 people were rescued, one body was recovered and another three are believed to have gone down with the vessel.