Making its second big policy shift in just a week in power, the government is easing the country's hardline stance against refugees who try to enter illegally.

First to benefit are seven Myanmar asylum seekers, who will be allowed to settle down in Brisbane.

The men had been held on the Pacific island of Nauru since being picked up off the coast of north-western Australia in August last year. The group, who fled Myanmar, came from the Rohingya ethnic minority.

Immigration Department officials were due to arrive in Nauru yesterday to finalise resettlement arrangements for the men, who convinced the government that they had a well-founded fear of persecution if they were forced to return home.

The move is in line with an earlier Labor commitment to abandon the 'Pacific Solution' at the earliest opportunity.

Immigration Minister Chris Evans has branded it a 'costly failure'.

Under the Pacific Solution, boat people arriving in Australian waters were sent to Australian-funded detention centres on Nauru - a tiny and impoverished nation - or Papua New Guinea's Manus Island, sometimes languishing behind razor-wire fences for years and having no access to the Australian legal system.

It is estimated that the detention of boat people on Nauru and Manus had cost the previous administration A$300 million (S$380 million) since the introduction of the measures in 2001.

Former prime minister John Howard introduced the policy after a surge of illegal arrivals by sea in 2000.

The Nauru detention centre hit worldwide headlines in early 2004 when a number of detainees staged a hunger strike and sewed up their lips in protest at their incarceration.

Although the Howard administration's controversial crackdown succeeded in deterring many asylum seekers from making the hazardous boat trip to seek sanctuary on Australian soil, it did little to enhance the country's human rights reputation.

While the new government is keen to close the two offshore detention centres, it will not necessarily be any easier for illegal migrants to enter Australia.

Sixteen Indonesian asylum seekers who were rescued from their leaky vessel off the northern coast of Australia last month are expected to be repatriated to their island home shortly because they were not fleeing social, religious or political persecution.

Mr Evans said this reflected his government's 'firm but fair approach to the orderly migration of people to Australia'.

There is also a question mark over the future of 82 Sri Lankans being held on Nauru. Although 74 of them have been identified as genuine refugees, they have not been resettled so far.

The remainder are facing charges over the alleged rape and sexual assault of a Nauruan woman.

A decision on the future of all the Sri Lankans is expected to be made soon, government officials have indicated.

Refugee groups have welcomed Labor's decision to abandon the Pacific Solution, pointing out that the controversial measures caused needless suffering and incurred great expense to Australian taxpayers.

Mr David Mann of the Refugee and Immigration Legal Centre said he was relieved the new government had acted so swiftly to end what was a 'nightmare' for many asylum seekers.

'We can only hope that such a damaging and unnecessary process is not inflicted on anyone in the future,' he said.

rogmaynard@compuserve.com