Britain is considering using old ferries moored off the UK coast to house asylum seekers.
Downing Street is giving serious thought to buying disused ferries and converting them into processing centres to deter migrants from crossing the English Channel from France, The Times reported.
The Home Office also held talks about buying retired oil platforms in the North Sea for processing.
However, the idea was rejected by ministers who believed it would pose logistical and safety issues.
Moving migrants onto ships is seen as a “more realistic” option to add to a list of suggestions to put to Prime Minister Boris Johnson.
It comes after claims the UK was considering sending migrants to Ascension Island, an isolated British overseas territory in the south Atlantic.
It emerged Downing Street also explored sending migrants to Moldova, Morocco and Papua New Guinea.
The suggestion is reminiscent of Australia’s hardline offshore processing regime, a system which deterred migrants arriving on Australian shores but attracted criticism from the United Nations and human rights groups over the alleged abuse of refugees.
According to The Guardian, Downing Street asked the Foreign Office to "offer advice on possible options for negotiating an offshore asylum processing facility similar to the Australian model in Papua New Guinea and Nauru".
Officials were said to have “pushed back” on the suggestion of building UK processing facilities in other countries.
Home Secretary Priti Patel has previously pledged to make the Channel crossing “unviable” for migrants.
Speaking on BBC's Radio 4 Today programme, former director general of immigration enforcement David Wood described offshore processing as a "non-starter".
He said: "It would be detention by definition. You are taking someone where they don’t want to go."
But Tory MP Adam Holloway argued the UK had a "humanitarian duty" to make the "extremely dangerous" Channel crossing unappealing for asylum seekers.
"You’ve got to have some sort of deterrent," he said.
Five times as many migrants crossed the Channel in the first eight months of this year compared to the same period last year.
Nearly 5,500 migrants made the journey between January and September, according to Home Office statistics.
The UK’s National Crime Agency (NCA) warned migrants making the crossing would be a persistent “cat and mouse” game for authorities.
NCA deputy director Matthew Long said: “At the heart of this is people, and we shouldn’t lose sight of the fact that criminal groups, organised groups are exploiting and treating humans like a commodity.
"They are making money knowingly from putting them in incredibly life-threatening situations."
Refugee groups pleaded with the government to find other ways to solve the crisis rather than offshore processing.
Refugee Action chief executive Stephen Hale said: “This ludicrous idea is inhumane, completely impractical and wildly expensive. So it seems entirely plausible this Tory Government came up with it.”
Rossella Pagliuchi-Lor, the UK representative of the United Nations High Commissioner for Refugees, added: “This is the Australian model and I think we have already seen that the Australian model has brought about incredible suffering on people who are guilty of no more than seeking asylum.”