By Matt Siegel and Jane Wardell
SYDNEY (Reuters) - The fate of 157 Sri Lankan asylum seekers held at sea for almost a month before being brought to a detention centre in Australia was stuck in limbo on Monday, as lawyers for the detainees said they might sue the government for illegal imprisonment.
The interception and detention of the Tamil asylum seekers, including 50 children, has highlighted Australia's controversial policy of turning back boats carrying potential refugees, which has drawn criticism from rights group and the United Nations.
The government made the decision to bring the group to Australia on Sunday after lawyers began legal action in the High Court to stop them being sent to Sri Lanka, and disputing the government's stated right to assess asylum claims at sea.
High Court Justice Kenneth Madison Hayne ruled on Monday to vacate an earlier decision to hear that case next week, citing the changed circumstances, but left the door open to fresh hearings.
Indian consular officials were due to begin interviewing some of the group, whose boat was intercepted by the Australian navy after setting sail from India, which has agreed to take back any of its nationals among the group.
But Hugh de Kretzer, a lawyer for some of the asylum seekers, said he did not believe deportations would begin before new hearings and they were considering fresh legal action.
"The High Court case that was proceeding was entirely about the Maritime Powers Act and the powers of the government at sea to intercept a vessel and take it somewhere other than Australia," he said after the ruling.
"Now that they've been brought to the Australian mainland, different legal questions arise as to the power of the government to seek to compel them to return to India or to Sri Lanka or anywhere else."
ECONOMIC MIGRANTS
There appeared to be little sign the negative attention Australia has garnered from the case was having any impact on the government's key election promise to do whatever it thought necessary to stop the boats.
Australian Immigration Minister Scott Morrison remained defiant on Monday, welcoming the High Court decision and arguing that he was already confident the group were economic refugees and thus not entitled to asylum in Australia.
"These people have come from a safe country of India. They haven't come from Sri Lanka," he told ABC radio.
"If we can't take people back to India, what is next? New Zealand? India are a vibrant democracy, they are a good partner, they're working closely with us."
The group are the first asylum seekers traveling by boat to reach mainland Australia in seven months, an apparent setback for the government's policies.
Conservative Prime Minister Tony Abbott's government had boasted of its success in deterring asylum seekers from making the perilous journey, often in unsafe boats after paying people smugglers in Indonesia.
Australia normally uses offshore detention centres in Papua New Guinea and the tiny South Pacific island nation of Nauru to process would-be refugees who arrive on boats.
While Morrison said that the group would be processed at the Curtin Detention Centre in the Western Australian outback, he stressed it will not be resettled in Australia and has released little information about it.
The asylum seekers were brought ashore in the Cocos Keeling islands at the weekend after being held on an Australian customs boat, and transferred in smaller batches by plane to Curtin.
Their plight came to light after a separate group of 37 Sinhalese and four Tamils on another boat was quietly intercepted and returned to Sri Lanka by Australian authorities.
About 16,000 asylum seekers came on 220 boats to Australia in the first seven months of last year, but the government says there have been no illegal boat arrivals since December 2013.
(Reporting by Matt Siegel and Jane Wardell; Editing by Clarence Fernandez)