Australian Prime Minister Julia Gillard says her government wants to revive an asylum-seeker swap deal with Malaysia.

She spoke after receiving the backing of her Labor Party caucus for proposed legislative changes to the Migration Act to allow such an arrangement.

Australia's High Court ruled this month that her plan to send 800 asylum-seekers to Malaysia in return for 4,000 processed refugees was unlawful.

The ruling threw the controversial plan to control immigration into disarray.

The plan - dubbed the Malaysia Solution - was supposed to send a tough message to people arriving in the country by boat that they would not be processed in Australia.

"Malaysia... was the best option for smashing the people smugglers' business model. It remains the best option," Ms Gillard said.

But the High Court ruled that Malaysia did not offer adequate protection for refugees. The country is not a signatory to the United Nations convention on refugees.

"We are determined to pursue the arrangement we have made with Malaysia," Ms Gillard said.

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