Australian Prime Minister Tony Abbott says there is "absolutely no evidence" asylum-seekers suffered burns while under the direction of the Australian navy.
It follows the airing of footage by ABC News showing asylum seekers being medically assessed for burns on their hands after they were picked up in Indonesian waters earlier this month.
Indonesian police said that seven passengers had accused navy personnel of forcing them to hold onto hot pipes coming out of their boat's engine during a boat tow back to Rote Island.
AAP reports that Mr Abbott has dismissed the allegations.
"There's absolutely no evidence for them," he said in the Swiss resort of Davos where he is attending the World Economic Forum, "these are just claims without any apparent facts to back them up."
Okto George Riwu, a spokesman for Indonesia's East Nusa Tenggara provincial police, said officers were looking into the allegations but did not yet have evidence to support them.
Mr Abbott said the claims would not impact upon Australia's longstanding policy of turning back asylum-seeker boats "when it's safe to do so".