Prime Minister Jacinda Ardern has pledged $3 million to Papua New Guinea and aid agencies to help care for refugees on Manus Island as Australia continues to ignore New Zealand's offer to take some of the men.

A group of Manus Island asylum seekers are luring underage girls as young as 10 into sex, an Australian Government intelligence report claims.

The Australian Government has confirmed the accuracy of the diplomatic cable, obtained by The Australian Financial Review and Stuff.

However, the timing of the leak, and several others in Australian publications, suggests rising levels of frustration within the Australian Government that Prime Minister Jacinda Ardern was putting undue pressure on a domestic Australian policy issue.

HANDOUT Detainees stage a protest inside the compound at the Manus Island detention centre in Papua New Guinea in an undated image released on November 13.

It's prompted questions on this side of the Tasman, over whether there were concerted efforts from Australia's Malcolm Turnbull-led Government to force Ardern to back down on a strong stance that Australia should accept an invitation to resettle 150 people seeking asylum in New Zealand.

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* Jacinda Ardern steps up pressure on Malcolm Turnbull over refugee offer

LISA MAREE WILLIAMS/GETTY IMAGES Prime Minister Jacinda Ardern says the relationship between New Zealand and Australia is strong, as a series of Australian Government leaks on Manus Island refugees suggest anger on that side of the Tasman at New Zealand's position to take some of them.

Intelligence advice to the Australian Government, sent in early October from Papua New Guinea, details allegations of shocking behaviour by some of the asylum seekers squatting in the now-closed Australian centre on Manus Island.

"In addition to broader allegations of drug taking and dealing (Marijuana), there were overarching community concerns regarding allegations that some residents were engaged in sexual activities with underage girls," the report states.

The report was concerned that male camp residents were travelling into the community to procure sex with underage girls.

POOL Ardern and Turnbull met recently at the East Asia Summit. Ardern announced shortly after, $3m in humanitarian aid for asylum seekers still on Manus.

It states that "some residents were renting rooms throughout Lorengau and luring underage girls between 10 and 17 years of age, with money, goods and food".

While the report states police were unable to investigate the claims because they had not been reported, the local provincial health authority had written to the provincial police commander expressing concerns about "increased interaction between the residents and the young girls from a health perspective, saying they had seen an increase in sexually transmitted infections and HIV".

"We were also told that some parents were implicated in the conduct of their children", the intelligence cable says.

As a result, local Deputy Mayor Kakao Karani was concerned about "the closure of the Regional Processing Centre and the relocation of the residents closer to town".

According to the cable, Manus Island residents were also "unhappy with the stigma attached to the girls who engaged in the activities and the number of children born from the 'relationships' (reported at least 10 at the time of our last visit)".

Ardern has been increasingly insistent Australia should let New Zealand take some of the 600 asylum seekers remaining on Manus Island, following the closure of Australia's Regional Processing Centre.

It is understood the Turnbull Government is furious with what it views as Ardern's "moral posturing and naivety" on the matter.

The stand-off has caused rising tensions between the two countries, as Australia has come under international pressure over what has been described as a humanitarian crisis on Manus.

Australian government sources say they are extremely concerned about the messages Ardern is sending to people smugglers.

"The smugglers are watching every interaction between governments in the region on this issue and looking for a chance to restart their businesses," one senior Australian Government source said.

"They observe the statements of new leaders very closely and if they see a sign of policies shifting or changing, they take advantage of that."

An Australian Government spokesman declined to comment.

A spokesman for Ardern said "the relationship with Australia is strong".

"The offer to take 150 refugees from Manus Island and Nauru remains on the table, but clearly it's up to Australia to take up that offer," he said.

"In event the offer is accepted, all refugees will undergo comprehensive screening and assessment processes that includes credibility and risk assessments and security checks."

"Refugees who do not meet New Zealand's relevant immigration policies, security and biometric checks and risk and health assessment are declined."

Turnbull and Ardern have both returned from Apec talks and the East Asia Summit (EAS), in Vietnam and the Philippines, respectively.

The pair had an early meeting on the sidelines of Apec. However, Ardern said she wanted a "more substantive" talk on the Manus issue with Turnbull at EAS.

They did have some smaller talks and then a 20-minute discussion in the closing stages of the conference. Following that, Ardern announced $3 million in funding to help look after the asylum seekers, pending their resettlement.

Australian officials are understood to be perplexed about why Ardern's rhetoric has ramped up on the situation.

The Labour Party has had a long-held policy to double the refugee quota to 1500. However, it had not previously voiced opposition to the way the previous National Government had handled the issue. Australia's humanitarian intake in 2015-16 was 17,555.

There are concerns the issue could damage relations between the two countries, Australian Government sources familiar with the matter said. It comes after Australian Foreign Minister Julie Bishop said she could "find it very difficult to build trust" with an Ardern-led government prior to the election.

The Turnbull Government has said it is worried that if people seeking asylum - particularly those whose legitimacy or probity it questions - end up in New Zealand, it could be the catalyst for boat arrivals to start again. The concern is Wellington would get the credit for taking the asylum seekers, while it was Canberra that would face security risks and ultimately be responsible for processing any that turned up in their waters.

It would also be the Australian Coast Guard and Navy that would be forced to intervene if boats ran into trouble in notoriously dangerous stretch of ocean. Drownings were not uncommon.

One senior government source said that the "people smugglers' pitch could be: Go to Australia, end up in New Zealand".

Australian Minister of Home Affairs Peter Dutton refused to comment, but he flagged the Turnbull Government's concerns in an interview in Australia on Monday.

"We believe that if you sent people to New Zealand at this point in time, that the people smugglers would again be able to say, 'Look; you've only got to wait a couple of years on Manus Island or on Nauru and you'll go to New Zealand – good welfare system there, good health system, good education and housing system – and then you'll be eligible to go to Australia'."

OPERATION SOVEREIGN BORDERS

The Manus Island centre was hurriedly set up in 2013 as part of former Australian Prime Minister Kevin Rudd's populist push to counter then-Opposition leader Tony Abbott's hardline boat policy.

The Australian border protection policy is called Operation Sovereign Borders and has been in place since the Abbott's government was elected in 2013. It was heralded as a way to stop boat arrivals on Australian shores and end the people-smuggling trade. It has overwhelming public support in Australia, but has been at the centre of controversy on this side of the Tasman.

It has two key principles: Anyone who arrives by boat, will never end up in Australia and tany boat coming to Australia will be intercepted at sea and turned around and towed back - usually to Indonesia.

After up to 50,000 annual boat arrivals found to be illegal during the years of the governments of Rudd and former Australian Prime Minister Julia Gillard, the policy has had bipartisan support in Australia. Only the Green Party opposes it there. No boats have arrived since 2013.

- Australian Financial Review, Stuff