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By Matt Siegel

SYDNEY (Reuters) - Australia on Wednesday rejected claims by a group of asylum seekers that they were beaten and suffered burns while being returned to Indonesia by the Australian navy under a policy that has strained ties between the neighbors.

The Australian Broadcasting Corporation (ABC) on Tuesday aired video of asylum seekers getting treatment for burns they said were caused by Navy personnel forcing them to hold onto hot pipes coming out of the boat's engine while it was being towed back to Indonesian waters.

Immigration Minister Scott Morrison lashed out at the media for reporting what he called "unsubstantiated allegations" and said that he would conduct no investigation into the incident as he accepted the word of navy personnel.

"The Australian government is not going to put up with people sledging the Australian navy," he told reporters in Sydney. "I've been given assurances about their conduct and I believe those assurances because I believe in those individuals."

Indonesian police confirmed that a group of asylum seekers had required treatment for severe burns on their hands after they were picked up in Indonesian waters on January 6.

"I received a report from police in Kupang that they said they were burned because they were forced to hold on to the boat engine," Agus Barnas, spokesman for the coordinating ministry of legal, political and security affairs, told Reuters.

"They said they were forced by the Australians. We are trying to find out more."

Prime Minister Tony Abbott's conservative government came to power partly because of its tough campaign against asylum seekers and he insists it will not reverse course despite public pressure.

Its policies include maintaining offshore detention centers in the impoverished nations of Papua New Guinea and Nauru that hold thousands of asylum seekers.

The number of refugees reaching Australia pales in comparison with other countries, but it is a polarizing political issue that also stokes tension with Indonesia.

Australia last week apologized to Indonesia for naval breaches of its territory as part of Canberra's policy of stopping boats carrying would-be asylum seekers from entering its waters.

The incident comes as U.S.-based rights watchdog Human Rights Watch issued a blistering assessment of Australia's asylum seeker policy in its 700-page annual World Report.

"Successive governments have prioritized domestic politics over Australia's international legal obligations to protect the rights of asylum seekers and refugees," it said.

(Additional reporting by Kanupriya Kapoor in JAKARTA; Editing by Ron Popeski)

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