Some reports said that about 60 asylum seekers are feared dead after the boat sank off the Indonesian coast while other reports said three people had died.
One News Australia reported that local fishermen rescued about 120 people overnight, but another 60, including children, are missing or dead.
An Iranian survivor told ‘News’ that groups of asylum seekers were taken on smaller boats out to a big boat, but the bigger boat had a problem with its engine after about two hours of travel.
Australian Prime Minister Kevin Rudd’s parliamentary secretary, Ed Husic, called the news “awful”.
Immigration Minister Tony Burke said on he would consider the government’s asylum seeker policy a success when the drownings stopped.
“I’m not somebody who bashes the table and says look how tough we are,” he told ABC radio.
“We’ve got people drowning in the Indian Ocean and I want it to stop.”
In a separate incident the Australian navy has intercepted another boat carrying up to 40 asylum seekers west of Australia’s Christmas Island.