COLOMBO (AFP) - The Sri Lankan police have arrested a navy officer suspected of involvement in smuggling people in fishing boats to Australia, officials said on Saturday.

Australia announced tough new measures in mid-July to discourage illegal boat people. Since then, the local police have apprehended three boats and detained 300 Sri Lankans, including 56 women and 93 children.

The Sri Lankan officer was taken into custody on Friday following the discovery of 73 would-be illegal immigrants in a trawler off the island's southern coast six weeks ago, a police officer said.

Four navy sailors were taken into custody last month following the trawler's interception.

But Lieutenant Commander Sanjeewa Annatugoda is the most senior officer to be arrested in connection with people smuggling, police said.

A navy official, who declined to be named, confirmed the officer's arrest, and said internal investigations were underway.

The latest arrest of a navy officer is an embarrassment for Colombo, which has maintained that there is no senior-level official collusion with people smugglers.

Australia has said it will transfer all asylum seekers to impoverished Papua New Guinea and Nauru. Even if their asylum claims succeed, they will not be settled in Australia.

But Sri Lankan officials said the announcement did not appear to be a deterrent for many Sri Lankans hoping to start a new life in Australia.

Australia has been supporting efforts by Sri Lanka's navy to improve its ability to detect people-smuggling boats.

Sri Lankans pay up to US$7,600 (S$9,730) to people smugglers for a place on trawlers that take up to three weeks to make the crossing to Australia.

Some migrants travel by air to Indonesia and then take rickety wooden vessels to the Australian coast.