By Alicia Ng

The deal with Malaysia to accept asylum seekers is still on, Prime Minister Julia Gillard said today

Speculation that asylum seeker deal was dead mounted  after reports that Malaysia’s Home Minister Datuk Seri Hishammudinn Hussein said his country would not accept asylum seekers that arrived on May 14.

A boat carrying 32 asylum seekers was intercepted on May 14 and under the deal should be relocated to Malaysia for processing and in return Australia should take confirmed refugees from Malaysia.

The 32 asylum seekers who arrived on May 14 are currently being held on Christmas Island after Minister Hussein said that Malaysia would not accept them as they were not part of the transaction deal.

Prime Minister Julia Gillard, however, confirmed the deal is still on and said doubts raised about the deal are the result of misreporting.

“Asylum seekers arriving post my announcement will be taken into detention pending removal and they will be removed to a third country,” she said.

“What he said, and it’s just simple common sense, is that people wouldn’t be taken to Malaysia until the agreement has been entered into.”

Opposition Leader Tony Abbott said the mishap is an indication that the Prime Minister announced the policy before it was ready and it is now coming undone.

“This is a government which has lost control of our borders and is losing control of our detention centres , everything this government does seems to go wrong in this area,” he said.

Malaysia and Australia announced the deal on May 7 whereby Australia would accept 4000 refugees from Malaysia and Malaysia would take up to 800 new boat arrivals for processing.