Australian PM Scott Morrison says he will reopen a controversial detention centre on Christmas Island, after a historic defeat in parliament.
On Tuesday, non-government MPs secured enough votes to pass a bill making it easier for sick refugees held offshore to be treated in the country.
Mr Morrison said the law would weaken the nation's tough border policies and embolden human traffickers.
Opponents accused him of spreading fear before an impending election.
Since 2013, Australia has sent asylum seekers arriving by boat to detention centres on Manus Island (Papua New Guinea) and Nauru.
It previously also sent detainees to Christmas Island, an Australian territory in the Indian Ocean which is about 2,600km (1,600 miles) from the mainland and 300km south of Indonesia.
The UN has criticised Australia's detention policies as "inhumane", but the nation insists they prevent human trafficking and save lives at sea.
What led to Mr Morrison's announcement?
Last year, Australians were horrified by reports of a mental health crisis among children on Nauru - including cases of attempted suicide.
It prompted the Labor opposition, the Greens and crossbench MPs to support a bill that gives doctors the power to recommend that refugees be transferred to Australia for treatment, reports the BBC.
However, the immigration minister would still have some authority to overrule transfers.
Mr Morrison fiercely opposed the bill but it was narrowly approved in the House of Representatives, where the government does not have a majority. It later cleared the Senate.
On Wednesday, Mr Morrison said the government would reopen the Christmas Island centre "to deal with the prospect of arrivals... and transfers" - arguing both were now more likely.
He added that Australia's border protection operations would receive other additional resources, but declined to elaborate.
"This parliament has already tipped its hand enough to the people smugglers," he said.
Why is he being accused of fear-mongering?
Opponents pointed out that the bill applies only to people already on Nauru and Manus Island, meaning new arrivals would not be eligible for transfer to Australia.
Labor's Senate leader Penny Wong said Mr Morrison was playing politics ahead of the election, likely to be held in May.
"[This is] a pattern of deceit and desperation from a man who is desperate to cling to office - a man who has nothing left, nothing left but deceit, fear and smear," she told the chamber on Wednesday.
What happened at Christmas Island previously?
The centre, which operated from 2003 until last year, saw numerous scenes of unrest - including riots, protests and brawls.
In 2010, about 50 asylum seekers from Iraq and Iran died when their boat smashed onto rocks off the island.
At its height, the centre held thousands of people. It closed in October when the final 35 detainees were removed.