The ACT Government wants to take hundreds more asylum-seekers out of detention each year and put them into the Canberra community.
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Chief Minister Katy Gallagher has written to Prime Minister Julia Gillard suggesting a dramatic expansion of the territory's role in the humanitarian settlement program, taking 200 more asylum-seekers each year.
Ms Gallagher said her plan was the continuation of the ACT's ''compassionate'' approach to asylum-seekers which had already seen 40 people released from detention centres settled in the capital this year.
Ms Gallagher made her offer last month in a letter to Ms Gillard and Immigration Minister Chris Bowen after the High Court decision that left the Federal Government ''Malaysia solution'' in shreds.
The decision effectively ruled out any form of offshore processing and forced the Gillard Government to concede that asylum-seekers would have to be moved out of overcrowded detention centres and into the community.
The ACT Government, which until now has been reimbursed the entire cost of service to asylum-seekers in the Canberra community, also made it clear that it would consider helping out financially.
Making her offer, Ms Gallagher said she wanted asylum-seekers who arrived by boat currently in immigration detention to be treated with compassion in the community.
''The life of an asylum-seeker can be one fraught with danger, anxiety and hostility,'' Ms Gallagher wrote.
''The ACT has taken a compassionate stand and has treated asylum-seekers as it would any other vulnerable Canberran, providing services to meet their essential needs whilst they wait for a determination on their visa applications.''
Ms Gallagher told Ms Gillard and Mr Bowen that the ACT had the social services capacity to successfully accommodate a greater number of asylum-seekers.
''Given the processing and subsequent successful settlement of past asylum-seekers in the ACT, my Government would encourage the placement in the ACT community of additional members of vulnerable families now in detention centres,'' she wrote.
''The ACT is willing to welcome an additional 200 people each year from a detention centres administered by the Australian Government under the Residential Determination Program. The ACT has a strong network of committed community and government service providers with the capacity to provide the necessary assistance to asylum-seekers while they await the outcome of their visa applications.''
Ms Gallagher also indicated she would consider a lower level of reimbursement from the Commonwealth for asylum-seeker services.
''I understand that the charging regime for the Residential Determination Program has been at full reimbursement costs and I would welcome discussions with you or between our officials about how the ACT Government could facilitate some lower charges for additional recipients under the scheme,'' she wrote.
But refugee advocate Marion Le was lukewarm on the idea yesterday, saying that the Residential Determination Program was still detention, albeit in the community.
''Anything that will get people out of detention I welcome and I have great experience of Canberra welcoming refugees into our community over the years,'' she said.
''But the Chief Minister has not been directly involve in refugee settlement in Canberra so she may not be aware of the intrinsic problems of bringing them into the community and bringing them in when they are already being detained, which is quite a different matter.
''I don't want to pour cold water on it, but it's not as simple as it sounds.''
Meanwhile the Australian Navy has intercepted another boat of asylum-seekers off the coast of Western Australia.
The boat was stopped 41 nautical miles south-west of Browse Island in the Ashmore Reef Reserve, north-west of Western Australia. Initial reports suggested 57 people were on board.
