PEOPLE-SMUGGLERS are preparing for a further assault on Australian waters, with up to 5000 potential boatpeople massing in Indonesia, government sources have claimed.

Authorities are bracing for as many as 1500 arrivals in the next few weeks, with boats ready to head for Christmas Island from Serang province in the west, and to Ashmore Reef from around Surabaya in the east.

Government officials revealed yesterday that two boats carrying between 300 and 400 people had disappeared over the past eight months and were feared to have sunk with the loss of all aboard.

As the trade in human cargo becomes more reckless, at least four other boats have broken down at sea due to engine failure, or have hit reefs, in the past two weeks.

One boat heading to Christmas Island last week had to turn back to Indonesia when a passenger stepped through the rotten hull and the vessel began taking water [emphasis added].

Defending the Government's hard line on the Tampa crisis yesterday, Immigration Minister Philip Ruddock claimed in parliament that asylum-seekers were delaying their trips to Christmas Island as people-smugglers watched how the situation unfolded.

And as debate continued over the proposed new tough measures to tow ships back to seas, Mr Ruddock argued that existing powers to board, intercept and detain suspect vessels in international waters were failing to deter people-smugglers.

'The people-smugglers say, `thank you very much, but we're still coming anyway',' he said during question time.

An official later explained the minister's rationale: 'If they land those people on Christmas Island the smugglers are going to go `yep, green light, send them down'.

'If they don't and these people get back, then that's going to throw everything into confusion.'

The renewed fears follow an unprecedented 1700 boatpeople arriving in the past month, prompting the Government to build three new temporary facilities with more than 3000 beds.

Of most concern to Australian authorities is the surging people-smuggling pipeline from Serang province, through the Merak and Anyar ports, only two hours' drive from Jakarta.

From there, the journey to Christmas Island takes only 24-36 hours and the latest information suggests 1000 people are ready to travel in the next two to three weeks. [emphasis added]

To the west, around Surabaya, about 500 asylum-seekers are preparing to board vessels -- 350 of those were due to have departed yesterday on their three-day journey.

Once in Indonesia, hooking up with a people-smuggler is as easy as hanging around McDonald's in Sarinah district in Jakarta or across the road outside the office of the UN High Commissioner for Refugees. It is common for anywhere between 10 and 100 people to loiter around at once, said the source.

'It's like moving through a shoal of fish; basically just ask, `do you want to come to Australia?'.'