The Australian government is scrapping its plan to process asylum seekers offshore after Prime Minister Julia Gillard failed to secure enough votes in Parliament to approve a refugee swap deal with Malaysia.

Ms. Gillard canceled a parliamentary vote scheduled for Thursday after an independent lawmaker declared his opposition to legislation that would have permitted the deal.

Under the plan, Australia would have sent 800 undocumented asylum seekers to Malaysia where they would be detained while their asylum applications were processed. In exchange, Australia would have accepted 4,000 refugees from Malaysia whose applications have already been approved.

New legislation became necessary when Australia's High Court invalidated the plan, saying Kuala Lumpur had not signed the United Nations convention on treatment of refugees.

But Ms. Gillard's proposal was strongly opposed by the conservative Liberal Party and the left-wing Greens, whose support keeps Ms. Gillard's minority Labor Party in power.

Ms. Gillard said Canberra will honor its agreement with Malaysia to accept the 4,000 refugees, but warned of a likely surge of boat people coming to Australia. She put the blame squarely at the feet of opposition leader Tony Abbott.

A spokesman for the opposition said it was Ms. Gillard who capitulated to the the Greens, and said she should resign.