The coalition says federal Labor's plan to resettle asylum seekers on Manus Island is "unravelling" and claims Papua New Guinea's government has suspended talks on the plan.

Opposition immigration spokesman Scott Morrison says a letter from PNG officials sent to the Australian Department of Immigration shows the Labor government's plan has not been delivered.

He says the letter "demonstrates very clearly that discussions about how resettlement is to be done ... haven't even begun".

"The centrepiece of Kevin Rudd's PNG election fix, resettlement in Papua New Guinea, remains an unanswered question," Mr Morrison told reporters in Sydney on Saturday.

The plan was "unravelling", Mr Morrison said, before likening it to a donut.

"This is a deal that's a donut, there's nothing in the middle of it," he said.

In the letter, PNG's chief migration officer Mataio Rabura complains PNG companies are not receiving the business that had been suggested and of hasty decision making, and says discussions on resettlement have been suspended, News Corp Australia reports.

Mr Morrison brushed aside questions about a subsequent letter, restating the country's commitment to Labor's plan.

"The issue remains, he (Immigration Minister Tony Burke) has no detailed resettlement arrangements with Papua New Guinea," Mr Morrison said.

The opposition on Friday revealed a "boat buyback" scheme would be part of a coalition government $420 million regional policy to cut off the people smuggling trade.

Labor wants PNG to settle all asylum seekers who are found to be refugees after processing on Manus Island.

Prime Minister Kevin Rudd dismissed the media report, saying it was based on outdated correspondence.

"The truth of that matter is that that correspondence is a week or so old," Mr Rudd told reporters in Sydney.

"Those matters have been dealt with and agreed on already."