Ten Sri Lankan asylum seekers involved in the 2009 Oceanic Viking stand-off remain stranded in emergency accommodation in Romania.
The Australian Immigration Department has conceded the Tamils - eight adults judged by ASIO to be security risks and two dependent children - could end up in indefinite detention on Christmas Island unless a third country agrees to take them in, the Sydney Herald reported.
The 10 Tamils were among 78 rescued by Australia's Oceanic Viking vessel and taken to the Indonesian island of Bintan in October 2009.
However, the Tamils refused to leave the vessel and enter Bintan's detention centre, sparking a month-long stand-off.
The then Australian government finally enticed them ashore with the promise of rapid processing and resettlement in a third country within 12 weeks.
Australia originally resettled 15 of the group while more than half were resettled in countries such as the United States, Canada, New Zealand and Norway.
But no third country could be found for the remaining 17 passengers who ended up in a United Nations High Commissioner for Refugees transit centre in Romania.
The federal government finally agreed to take them last year and seven arrived in Australia in December.
But the others were forced to stay put after ASIO issued them with adverse security assessments.
Department of Immigration and Citizenship Secretary Andrew Metcalfe said the Romanian government had agreed to continue to host the group while resettlement efforts continued.
But Mr Metcalfe conceded if resettlement efforts failed they could be moved to Christmas Island to face "indefinite detention".
"That remains a possible scenario," Mr Metcalfe told a Senate estimates hearing.