Papua New Guinea has told Australia that PNG's current position was that Manus Island would not be recommissioned as an Australian-run detention centre.
This comes after Australia's foreign minister, Stephen Smith, met PNG leaders and discussed the new prime minister Julia Gillard's plans to set up a regional processing centre.
Ms Gillard had said she had talked to the president of East Timor and the prime minister of New Zealand about her plans.
She now says she never suggested East Timor was the only location being considered for a refugee processing centre.
Australia closed its Manus camp in 2008 when it also shut its camp in Nauru - seven years after they both had been set up.
In 2001, Australia decided that it wanted to process its asylum seekers abroad and approached Pacific countries to make available land for a camp.
Among them were Fiji, Kiribati, Tuvalu, Palau.