The federal Immigration Minister, Mr Philip Ruddock, confirmed yesterday that people smugglers in Indonesia were preparing to bring as many as 1000 illegal immigrants to Australia in large ships.

He said he had no confirmation that a boat carrying 700 people had left Indonesia, but said he had intelligence information that people smugglers were "consolidating" large numbers of people for such a journey.

"It is certainly the case that we have information that a consolidation of that size is going on," Mr Ruddock said.

The Age reported yesterday that intelligence sources had alerted Australian agencies that one ship carrying 700 people, another with 350 on board and a smaller vessel containing 70 boat people were on their way towards Darwin.

However, Customs Coastwatch planes picked up no sightings of these people-smuggling ships yesterday.

Sources said the sea route between northern Australia and Indonesia was wracked by heavy storms, suggesting the ships could have taken shelter somewhere in the archipelago if they had already left their ports.

"They could have had engine trouble, they could have been prevented from leaving, they could have had trouble getting a crew - anything's possible," the source said.

Intelligence operators in Indonesia have reported that people smugglers are switching from smaller boats to large ships and ferries.

"You only need one crew to take a lot of people on a bigger boat," a source said.