Australian officials allegedly paid people smugglers thousands of dollars turn a boat carrying refugees back to Indonesia, Fairfax has reported.

The allegations were made by an Indonesian police chief, who claimed that the boat’s six crew members were each paid $US5000.

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The boat contained 65 people from Bangladesh, Sri Lanka and Myanmar, and was headed to New Zealand. It was intercepted by the Australian navy in late May.

A letter to the New Zealand government signed by all 65 asylum seekers attests to the pay-off claims.

“Then they take away our better boat and give two small boats that had just a little dry foods like biscuits and chocolates, and they also give very little fuel, just 200 litres for four to five hour journey,” the letter says.

Immigration Minister Peter Dutton denied the allegations with a simple “no”.