Up to 20 of the Sri Lankans on the Australian Customs vessel, which is anchored off the Indonesian island of Bintan, have agreed to leave the ship and enter an Indonesian detention centre.

The deal is the first breakthrough in a stand-off involving the group since they were picked up in Indonesian waters more than three weeks ago.

Mr Downer, who was foreign minister in the Howard government, said the deal solves what federal Labor would see as "an immediate problem".

"But all they're doing is providing an incentive for people to try the same thing in the future," he told ABC Radio today.

Mr Downer also took a swipe at the government's handling of the issue, especially the message it was sending to Jakarta.

"If you do megaphone diplomacy with the Indonesians you end up with nothing."