A MAKESHIFT tent city was being erected last night to house the biggest boatload of illegal immigrants ever caught trying to enter Australia.

Immigration officials fear up to 2000 more illegals are on their way after 352 boatpeople, believed to be from the Middle East, were captured yesterday off the north-west coast by a Royal Australian Navy vessel.

Immigration Minister Philip Ruddock conceded detention centres in Western Australia were already close to capacity, and said officials would have to 'improvise' to house the refugees at the Curtin Detention Centre in Derby, in the state's north-west.

Patrol boat HMAS Dubbo intercepted the Indonesian inter-island cargo vessel near Ashmore Reef, about 600 nautical miles off Broome, just hours before it would have been able to land.

Mr Ruddock said the boatload was expected to be the first of several, with intelligence suggesting there were 2000 Middle Eastern migrants in Indonesia waiting to make the final leg of illegal journeys to Australia.

The Derby detention centre is already full, with 300 refugees, and the Port Hedland detention centre is close to capacity at about 750. 'We're going to have to improvise -- this group will be held in tents until we're able to get further accommodation in place,' Mr Ruddock said.

'I understand that on being located, and after being told of the penalties they faced for bringing people to Australia illegally, the crew sabotaged the engines and the passengers started throwing their passports overboard.'

The boat under tow by the Dubbo yesterday contained 299 Iraqis, 46 Afghans, four Iranians, two Algerians and one Palestinian. Most were men, but there were 10 women -- two pregnant -- and 27 children. The boatload was more than double the previous highest number of 140 illegal migrants captured and is the 24th boat this year containing Middle Eastern people.

Mr Ruddock has enlisted the help of former immigration minister Gerry Hand to advise his department on strategies to counter the growing numbers of illegal migrants.

He said the latest arrivals reinforced the need for legislation to be rushed through parliament changing the rules on illegal border entry. 'It'll be on the heads of the Labor Party and the Democrats if that measure is opposed, and the implications are that many more people will seek to come to Australia unlawfully.'

Mr Ruddock said many illegal migrants came to Australia seeking work associated with the Olympics and that local Iraqi and Afghan community leaders were encouraging people in their homelands to come to this country.

Opposition immigration spokesman Con Sciacca said current controls were failing and more resources needed to be put into stopping the flow at the countries of origin.