A suspected asylum-seeker boat has been intercepted by the Australian navy within 200 metres of Christmas Island, locals say.

The island's shire president Gordon Thomson says locals spotted the Indonesian fishing boat early on Friday morning about 100 to 200m from Smith Point, the entry to the island's harbour.

By the time he arrived to join onlookers at Smith Point before 7am, the boat was being towed by an Australian navy patrol boat and was about 3km to 5km out to sea.

'I saw the navy patrol boat towing the Indonesian fishing boat out to sea away from Christmas Island,' he told AAP.

'It's a wicked thing to do.'

The federal government is refusing to provide any information, with Prime Minister Malcolm Turnbull repeating the familiar 'we don't comment on operational matters' line when questioned by reporters in Darwin.

Government frontbencher Steve Ciobo refused to confirm the reports but said any arrivals would be processed offshore and would 'not find a home here in Australia'.

Mr Thomson says the federal government hasn't notified him about approaching boats since 2009.

He's questioned whether officials checked the boat's seaworthiness before towing it out to sea.

He believes the boat reached the operational area of the harbour, so Customs would have been required to issue a port clearance which can only be done if the boat is seaworthy, he says.

Labor demanded Immigration Minister Peter Dutton immediately detail what had taken place and provide an assurance that Australia was complying with its international obligations.

'It is unacceptable for this Liberal government to refuse to answer questions about this reported vessel and instead continue to peddle the phrase operational matters',' the opposition's immigration spokesman Richard Marles said in a statement.

'This is nothing more than a tired, lazy slogan for suppressing facts from the Australian community.'

Greens immigration spokeswoman Sarah Hanson-Young called on the government to allow the boat to land and unload its passengers.

The government needed to disclose what would happen to those on board and whether there were any women and children, she said.

'The idea that the government doesn't even want to acknowledge that this boat exists is farcical,' she told reporters in Brisbane.

AAP