By Jane Wardell
SYDNEY (Reuters) - Australia's conservative government on Wednesday defended its decision to stop asylum seekers passing through Indonesia from settling in Australia, a move that could leave Indonesia with thousands of refugees from the Middle East.
The government announced late on Tuesday that asylum seekers who registered with the U.N. High Commission for Refugees (UNHCR) in Indonesia after July 1 would no longer be eligible for resettlement in Australia.
Australia will continue to resettle some refugees who registered before that date, but it has cut the number of places allocated, meaning the waiting period in Indonesia to be resettled will be much longer.
Immigration Minister Scott Morrison said the new rules were designed to stop the flow into Indonesia of asylum seekers from Pakistan, Iran and Afghanistan.
"We're taking the sugar off the table," Morrison told ABC Radio on Wednesday. "People smugglers are smuggling people into Indonesia for the purpose of trying to get resettlement in Australia."
Australia and Indonesia resumed intelligence and military cooperation just three months ago after a months-long rift over Australian spying on former President Susilo Bambang Yudhoyono, his wife and other top Indonesian officials.
The number of asylum seekers reaching Australia pales in comparison with other countries but it is a polarising political issue. Prime Minister Tony Abbott campaigned heavily on the issue before winning elections last year.
The UNHCR had recorded 10,623 asylum seekers and refugees in Indonesia, awaiting resettlement, as of April. At that time, about 100 people were registering at its Jakarta office weekly.
Morrison declined to say whether the change was discussed by Abbott and current Indonesian President Joko Widodo at the weekend G20 Leaders Summit in Brisbane, but said Indonesia was "fully appraised" of the decision before it was made public.
"We are happy to work with Indonesia in any way we can to reduce the number of people in Indonesia, but not through the process of encouraging more people to come to Indonesia because they think they will get a visa to Australia," he said.
(Editing by Nick Macfie)