AAP
Two children face the prospect of years stuck on Christmas Island after their parents' bid for asylum was rejected on national security grounds.
ASIO rejected the Tamil couple along with three men who were involved in the Oceanic Viking standoff with Australia and Indonesia.
"They (the children) are legally detained on Christmas Island," Immigration Minister Chris Evans told reporters on Tuesday.
He denied the children were behind razor wire but did say they were with their parents who are in detention.
"We make appropriate arrangements for children not to have them in a detention centre," Senator Evans said.
"The children won't be in the detention centre itself.
"The children are formally with their mother in detention."
Australia will now work with the United Nations to find a country that will take the asylum seekers but Senator Evans offered no timeframe on how long that would take.
"As you know, this government's been very committed to trying to end that long-term, indefinite detention. But there's no doubt these are difficult cases."
The five Tamils were likely refused entry by ASIO because of links with the Tamil Tigers which is not a listed terrorist organisation.
The Tigers were only recently defeated after a lengthy civil war with the Sri Lankan government.
When asked if ASIO relied on information from the Sri Lankan government when processing the security clearances of Tamil refugees, Senator Evans did not directly answer the question.
"It's really a question for ASIO but ASIO are responsible under the act for the security assessment," he said.
ASIO declined to comment.
Opposition Leader Tony Abbott said the problem was completely of the government's making.
"He created this problem by caving-in to the would-be unauthorised arrivals on the Oceanic Viking," Mr Abbott told reporters in Cairns.
"He caved in to people who had effectively been holding this vessel hostage for more than four weeks.
"It's his problem and he should deal with it, but he shouldn't have created the problem in the first place."
Coalition customs spokesman Michael Keenan demanded to know why the individuals, who he said were first checked by ASIO either aboard the Oceanic Viking or while in detention in Indonesia, were even brought to Australia.
"It's just extraordinary," Mr Keenan told AAP.
"It's because (Prime Minister) Kevin Rudd did that secret deal and he had to fulfill it no matter what."
Sixteen Tamils from the Oceanic Viking remain in Indonesia's Tanjung Pinang Detention Centre.
Senior Indonesian diplomat Sujatmiko said they must be resettled within the next month.
"The deadline for them is February 12th, but the sooner the better," Sujatmiko told AAP.
The head of the detention centre, Sugiyo, said he expected "some movement" on the final group by the end of January.
Senator Evans said the government remained committed to the deadline.
"Their cases are proceeding and they'll be resettled accordingly," he said.
"It's all going according to timetable."