In a radical policy reversal, Australia is to offer thousands of asylum seekers the chance to apply for permanent residency.
Tough policies were introduced to deter migrants arriving by boat
The move follows lobbying from government backbenchers seeking a more compassionate approach to immigration.
Under the old rules, those deemed genuine asylum seekers were only given temporary visas.
Some refugee groups welcomed the move, but others dismissed it as politicking ahead of elections due later this year.
Immigration Minister Amanda Vanstone said 9,500 asylum seekers, who currently hold three-year temporary protection visas (TPVs), could now apply to stay in Australia on a permanent basis.
She said that many people granted these visas were now working in rural areas, in jobs which were usually hard to fill.
She said the new rules would ensure that "those making a significant contribution to the Australian community are able to remain here".
"We believe it is sensible to give these people an opportunity to apply for mainstream visas," Ms Vanstone said.
"Not all of them, of course, will get them, but they will be able to apply and they won't have to go offshore in order to do so."
According to our correspondent in Sydney, Phil Mercer, the move is a distinct softening of Australia's hard-line approach to asylum.
The controversial TPVs were introduced five years ago to deter the increasing number of people which the government terms "illegal asylum seekers" - those arriving without proper documentation, usually by boat.
Australia also accepts thousands of asylum seekers under its so-called Humanitarian Programme, whereby applicants are processed overseas, usually by UN structured organisations.
Controversial temporary visas
The three-year renewable visas released genuine asylum claimants from detention and allowed them to seek work, but left them with an uncertain future.
Their temporary status restricted their rights to social security benefits, and prevented them from bringing their families to Australia.
Ms Vanstone emphasised that the government was still taking a hard line on people smuggling and illegal immigration.
"I can assure you we are not going soft on border protection,"
she said. "I would never invite people smugglers to give it a go,
never, because they will meet a very strong response from this
Refugee advocates have given mixed views on the visa changes.
Some have welcomed what they describe as a more pragmatic approach by Prime Minister John Howard's conservative government.
But other campaigners have insisted the change is simply "rampant political opportunism", ahead of a federal election expected later this year.
"I think they are wiping the slate clear of difficult
issues before the election. It's been a hot issue in marginal
electorates across the country," said Howard Glenn, the national director of refugee lobby group A
The opposition Labor Party accused the government of hypocrisy and stealing its policy.
"For years the government has been saying that putting people in limbo on ongoing rolling temporary protection visas has acted as a deterrent," Labor's immigration spokesman Stephen Smith told reporters.