Australia's Immigration department has confirmed that facilities at the Christmas Island detention center have been stretched beyond their limits.
There are more than 1,400 detainees in the camp that lies in the Indian Ocean 2,600 kilometers northwest of Perth, Australia.
The latest arrivals sailed in by boat Thursday after avoiding interception by Australian border protection authorities.
It is the 54th vessel carrying asylum seekers to be found in Australia's remote northern waters this year.
Some inmates on Christmas Island are now being housed in large tents, a move which has prompted the conservative opposition to renew its call on the government to send back the boats to relieve the crisis.
Opposition lawmaker, Scott Morrison, says conditions at the isolated center will only get worse.
"We are now going to have a tent city on Christmas Island," he said. "Christmas Island is now overcapacity and these desperate people will be spending the hot summer months on Christmas Island under tents."
Refugee groups are calling on the government to close the camp and bring the detainees to the Australian mainland for processing.
Additional temporary buildings are being shipped to the Christmas Island facility to alleviate the accommodation crisis and in anticipation of more arrivals.
Australia's deputy Prime Minister Julia Gillard has rejected accusations that the government has lost control of Australia's borders.
"Under the previous government from time to time there are boats that made it through," she said. "That will happen but we have stepped up our border security presence."
Australia blames unrest in Sri Lanka, Iraq and Afghanistan for a surge in unauthorized arrivals trying to reach its shores by boat.
The vast majority of asylum seekers who arrive by sea are eventually deemed to be in need of Australia's protection and are allowed to settle permanently in the country.
Canberra grants visas to about 13,000 refugees every year under official humanitarian policies.