A search involving RAAF planes, Navy vessels and merchant ships was conducted about 65 nautical miles north west of Christmas Island, where the asylum boat was last seen.
It has emerged that those who died were likely to be from the mainly Shia Afghan ethnic group.
Australia’s Refugee Action Coalition spokesman Ian Rintoul said it was believed the boat had travelled from Indonesia and his contacts in the country said it was carrying Hazaras.
Prime minister Julia Gillard and Australian’s immigration minister Brendan O’Connor have decided to leave the bodies in the water on Monday to tend to other asylum seekers’ boats.
“As border command has made clear, they always put the highest priority on saving lives,” Australian prime minister Julia Gillard said in Brisbane on Tuesday.
She said the “dreadful tragedy” was a reminder of how dangerous the journey to Australia can be by boat.
According to reports at least 660 asylum seekers reached Australia in June, with more than 11,300 arriving so far in 20103.
Just 14 survivors were plucked from the water from the vessel which was carrying just over 70 people.