JAKARTA - Indonesia extended by a week on Friday a deadline for an Australian customs ship loaded with 78 protesting Sri Lankan asylum seekers to leave its territory.

The extension would allow the Oceanic Viking, which has been moored on Bintan island since last month, to stay while a solution is found to an impasse that has seen the migrants refuse to disembark, Foreign Ministry spokesman Teuku Faizasyah told reporters.

"We have issued a permit for the Oceanic Viking to stay in Indonesian waters until Friday next week," Faizasyah said.

"Hopefully, the extension of the permit could be an incentive for Australia to speed up the negotiation process with the Sri Lankan migrants and come up with a resolution," he said.

The migrants were rescued by the Australians last month and brought to Indonesia by agreement between the two governments, but the ethnic Tamil Sri Lankans have refused to deal with the Indonesians and insist they be taken to Australia.

Australian media have reported that some of the migrants, who were rescued in Indonesia's search and rescue zone, had already been classified as refugees and had been living in Indonesia for up to five years.

The migrants are a part of a succession of over 1,500 people from countries such as Sri Lanka and Afghanistan that have made the risky boat journey to Australia this year, triggering severe political headaches for Prime Minister Kevin Rudd.

Faizasyah said Indonesian and Australian officials met privately on Wednesday to come up with a joint solution to the issue and that relations between the two countries remained healthy.

Indonesia had earlier expressed annoyance about talk in Australia of an "Indonesia Solution" to the crisis that would see Australia pay its northern neighbours to temporarily pay host to asylum seekers stopped at sea.

The sinking of a boat carrying 39 Sri Lankan migrants in stormy weather in waters northwest of Australia this week killed 12 people.