SYDNEY (AFP) - The UN expressed "profound concern" Thursday over reports that Australia was screening Sri Lankan asylum-seekers at sea and handing them over to Colombo, as Prime Minister Tony Abbott denied breaking international law.

Concern has been mounting over the fate of two boats, one reportedly carrying 153 Tamil Sri Lankan asylum-seekers and another with 50 on board, intercepted in recent days by the Australian navy in Australian waters.

Under its policy of not commenting on "operational matters", Canberra has refused to confirm the boats exist, sparking criticism from the media, rights advocates and the UN refugee agency UNHCR.

"UNHCR has followed with profound concern recent reports in the media and from the community in relation to the interception at sea of individuals who may be seeking Australia's protection," the agency said in a statement.

It reminded Canberra of its international obligations and insisted that asylum seekers should be individually screened and accorded fair procedures.

"Anything short of such a screening, referral and assessment may risk putting already vulnerable individuals at grave risk of danger.

"International law prescribes that no individual can be returned involuntarily to a country in which he or she has a well-founded fear of persecution," the UNHCR said.

It came as The Australian newspaper said a mid-ocean transfer of some would-be refugees to a Sri Lankan naval vessel was imminent, with the government keen to maintain its record of no boatpeople making it to Australia for more than six months.

This was likely to take place in international waters, the newspaper added.

In Sri Lanka, while the navy maintained publicly that no transfer had taken place, an official source told AFP that at least 50 of its nationals could be returned.

"There are discussions underway and about 45 to 50 people who are supposed to have set off from the (Sri Lankan) east coast could be brought back by the navy in the coming days," the source said, asking not to be named.

Sri Lanka navy spokesman Kosala Warnakulasooriya insisted that no naval craft had been deployed to return its citizens.

"We have not sent out any of our vessels or our personnel on any such mission," Warnakulasooriya said, while declining to comment on reports that a transfer could take place within days.

Separately, the Sydney Morning Herald reported that those on board the boats were being asked just four basic questions via video link to the Australian boat that picked them up in assessing their claim for asylum.

"Allegations that Australian authorities have intercepted at least two Tamil boats and handed them over to the Sri Lankan navy after only brief telephone interviews are extremely troubling," said Human Rights Watch director Elaine Pearson.

Refugee lawyer Julian Burnside told the Herald that Canberra could be guilty of refoulement - the returning of refugees - with the apparent screening process in breach of international law.

"Australia may want to protect its borders, but it should not risk being complicit in torture by sending Tamil asylum-seekers back to Sri Lanka without a proper process to assess the legitimacy of their claims," Pearson said.

Abbott said he was confident Australia was abiding by its international obligations, while claiming Sri Lanka was "a society at peace".

"Everything we do is consistent with safety at sea and everything we do is consistent with our international obligations," he said.

Under its hardline policies on tackling boatpeople, Abbott's conservative government has been turning vessels back to Indonesia, where most originate.

But this is believed to be the first time one would be returned to Sri Lanka.

"Sri Lanka is a peaceful country now. I don't say it is a perfect country," Abbott added in response to concerns about what might happen to those returned to a nation they had fled in fear of persecution.

"The horrific civil war is well and truly over. Everyone in Sri Lanka is infinitely better off due to the cessation of civil war."