Photo © AAP Image/Rural Australians for Refugees, file

Nauru lies near the equator, about 3000km northeast of Australia, and is one of the smallest and poorest nations in the world, with a population of fewer than 15,000 people.

In 2001, the Howard government spent $80 million setting up the Australian taxpayer-funded detention centre for asylum seekers on Nauru, in what became known as the ‘Pacific Solution’. Labor has always slammed the processing facility as inhumane.

But now there are renewed calls for the Government to consider the Nauru option, after the nation has said it was open to signing the UN refugee convention and would consider reopening the detention centre closed by Labor.

"Basically, the infrastructure is still in place," Nauruan President Marcus Stephen said.

Foreign Minister Stephen Smith has said he while he welcomes the developments in Nauru, he remains “squarely focused” on East Timor to house an offshore processing centre, despite East Timor’s parliament unanimously rejecting Gillard’s proposal on Monday.

Smith has tried to pour more cold water on the idea of using Nauru, saying any processing centre would have to be endorsed by the UN High Commissioner for Refugees, which previously criticised the Howard-era Nauru detention facility.