An extra 1000 asylum seekers could be housed at a new detention facility for families near Darwin, the Immigration Minister has said.
The new facility will be set up in a building adjacent to the Wickham Point Immigration Detention Centre.
Brendan O'Connor told Channel Seven the facility was necessary to meet the needs of families.
"We need to detain people for security, identity and health purposes, and we need the facility, we want to make sure the amenities both in terms of infrastructure and provision of services are suitable," Mr O'Connor said.
Ian Rintoul from the Refugee Action Coalition said he was concerned by the expansion of the detention network.
"It's difficult to understand why the Government wouldn't provide the resources so that people could go straight into the community," Mr Rintoul said.
"Long-term problems arise from having families and children in detention."
The news comes as Customs and Border Protection officials decided not retrieve the bodies of a group of asylum seekers who are presumed to have perished off Christmas Island.
A boat carrying at least 55 people was found upturned on Friday, 65 nautical miles northwest of the island.
At least 13 bodies were spotted in the water.
The Australian Maritime Safety Authority suspended the search last night.
Customs and Border Protection says its priority remains on responding to vessels in distress and preventing any further loss of life at sea.