Opposition Leader Bill Shorten has left the door open to Labor supporting a permanent entry ban on asylum seekers and refugees who arrived by boat, despite calling the proposal "ridiculous".
Mr Shorten accused Prime Minister Malcolm Turnbull of placating extremists including Pauline Hanson with the move, which would stop such refugees from even visiting Australia.
Mr Turnbull and Immigration Minister Peter Dutton unveiled the extraordinary lifetime ban at the weekend and have begun wooing crossbench senators in case Labor tries to block the policy.
The proposal has started a war of words amid claims it is excessive, and that it breaches Australia's international treaty obligations.
Mr Shorten – whom Mr Turnbull phoned on Sunday to brief on the plan – said Labor wanted to see the details, but suggested it made no apparent sense to stop people entering forever, especially as tourists or for legitimate business purposes.
"It seems ridiculous to me that a genuine refugee who settles in the US or Canada and becomes a US or Canadian citizen is banned from visiting Australia as a tourist, businessman or businesswoman 40 years down the track," Mr Shorten said.
He pointed to past refugees such as Frank Lowy, Gustav Nossal and Hieu Van Le, saying they had "made a huge contribution to Australia".
"As an Australian, that's something I'm very proud of."
Other problems could arise because the ban would mean Manus Island or Nauru refugees resettled in third countries could be subject to future discrimination if denied the freedom-of-movement rights of other citizens.
New Zealand Prime Minister John Key, whose country has been mentioned as a likely new home for the refugees, said he would not agree to treat refugees as second-class citizens in future.
Mr Key said his government would not support a stipulation to "create different classes of New Zealand citizens" by barring refugees accepted by it from entering Australia.
"We'd have to see what they ultimately pass and what they try to impose, but fundamentally there's a free movement of people from one country to the other ... we've got no intention of having separate classes of New Zealand citizens," he said.
With the politics of this issue perilous for Labor – one senior figure branded it "abhorrent" – Mr Shorten is being careful not to give the government any scope to portray him as soft on boats.
Fairfax Media understands the political edge is only part of the motive for the Coalition's move. The government is increasingly frustrated that refugee activists have been "irresponsibly" encouraging detainees to hold out for a policy softening from Canberra, and so Mr Turnbull has decided to send the opposite signal.
The announcement has reignited an incendiary partisan debate over asylum seekers, with Mr Dutton branding Mr Shorten weak, and the Labor leader depicting Mr Turnbull as a captive of Pauline Hanson and of Liberal Party reactionaries.
"Two weeks ago, Mr Turnbull was happy to trade a vote in the Senate for weaker gun laws, last week his government lied about dodgy data to smear single mums, and now he's shown he's happy to suck up to chase the votes of One Nation senators to fight off Tony Abbott and keep his job," he said.
"He's earning the praise of Pauline Hanson – I hope he's proud of that.
"The old Malcolm Turnbull would never have proposed this to keep the extremists in his party happy.
"We'll look closely at the legislation when the government can be bothered releasing it."
Speculation is rife that Canberra may be close to finding a final destination country for some of the hundreds of refugees on Nauru and Manus Island, after secret talks with one or more foreign governments.
Both Mr Turnbull and Mr Dutton quelled such talk but they refuse to be drawn on a suggestion that New Zealand may be on the table.
Mr Key was even less sanguine about a future trans-Tasman breakthrough.
"That offer [of resettlement] hasn't really moved – it sits there," he said.
"There's no obvious appetite from Australia to take up the offer [and] I think it's increasingly unlikely that they will."
He said Australia appeared determined to use "every sort of fibre that they've got" to stop refugees brought by people smugglers from settling there.
The government says the ban has been designed to send the strongest possible message to "criminal people smuggling" operations that trade on vulnerable asylum seekers.
A source close to Mr Shorten said: "Bill's instinct is this is all just cynical politics. They try this trick every few months and it never works. He's deeply sceptical of Turnbull's motivations.
"It's clear as day [Turnbull is] so petrified of opinion polls he's clutching at anything."
With Sam Sachdeva and Michael Koziol