Australia is considering a plan to give citizenship to the 10,000 people of Nauru, an impoverished island in the South Pacific, as a reward for hosting refugee detention centres over the past two years.
Foreign Minister Alexander Downer has instructed his department to look at ways of ensuring the tiny island state, which covers 21 sq km and lies just south of the equator, remains viable.
Other options include allowing Nauruans to resettle on an uninhabited Pacific island, drastically overhauling the country's finances or boosting Australian aid. Mr Downer has asked for the rescue plan to be drawn up by the end of next month.
Phosphate mining once made Nauruans among the richest people in the world. But phosphate stocks are almost exhausted, and mining has devastated three-quarters of the island, leaving its interior a bleak moonscape devoid of trees.
There is a lack of drinking water and fresh vegetables, power cuts are common and the country is effectively bankrupt.
For the past two years the island has relied on A$30 million (HK$172 million) in Australian aid to maintain detention camps as part of Australia's so-called 'Pacific Solution' for deterring asylum-seekers.
Three hundred mostly Afghan and Iraqi refugees are being held on Nauru, with 35 staging a hunger strike in protest at their failure to secure asylum in Australia.
A new detention facility is being built on Australia's Indian Ocean territory of Christmas Island, which will make the Nauru camps redundant. Mr Downer said yesterday that allowing Nauru's entire population the right to resettle in Australia was the least favoured option.
'The weakness of that proposal, which was [also] canvassed in the late 1960s, is that you can't underestimate the fact that the people of Nauru love Nauru and want to live in Nauru,' he said.
But he said the seriousness of the problems Nauru faced could not be ignored. 'We can't just abandon Nauru. I can't turn my back on the 10,000 people who live there and say, 'Oh well, they're fine for as long as they're useful, but once the processing facilities aren't needed anymore, that's it, goodbye'.'