Cath Hart and Samantha Maiden – John Howard has pulled the plug on his controversial migration bill to avoid facing a defeat in the Senate.

The Prime Minister told a press conference this afternoon: "It was made very clear to me this morning that a government senator would cross the floor and vote against the legislation." Liberal Senator Judith Troeth has led dissent against the bill.

Mr Howard said he was "disappointed" with the outcome. "I believed in this bill, I still do, but I accept that there aren't the numbers in the Senate to pass it, and I'm a realist as well as a democrat," he said.

"And that is why we've taken the decision we've taken today but don't let anybody think for a moment that I didn't believe in it – I believed in it very strongly – and I suspect did the majority of the Australian community."

He did not regret proceeding with the bill. "I proceeded with this bill because I believed it would add strength to already strong border protection laws," Mr Howard said.

"Australia has very strong border protection laws. This bill would have made those strong border protection laws even stronger."

It would have required only one senator to cross the floor or two to abstain from voting to defeat the bill, which would have forced any unauthorised arrival to have claims for asylum processed offshore by the United Nations.

The Government was facing defeat after Family First senator Steve Fielding said yesterday he could not support a policy designed to appease Indonesia. Up to four Coalition senators refused to say whether they would cross the floor if it went to a vote.

Rebel Nationals senator Barnaby Joyce said yesterday he would abstain from the vote unless the Government agreed to his new amendment to allow the Senate to review every asylum-seeker decision. But government sources indicated his proposal was unlikely to secure support.

Senator Fielding announced his surprise decision to oppose the legislation after talks with Papuan refugees and the Indonesian ambassador. "You know, I started to really look at it and I thought, look... obviously it's to appease another country and it's the Indonesians," he said.

"Imagine if every other country did what Australia is proposing. It would be chaos. There would be absolute chaos if everybody decided to boot people off to a foreign land."

The new laws were introduced after a diplomatic rift emerged between Indonesia and Australia over the decision to grant asylum to 42 boatpeople from Papua, who arrived in far-north Queensland in January.

The Government was accused of appeasing Indonesia, with its new laws that would send all boatpeople, including those who arrived on the mainland, to overseas processing centres such as that in Nauru.

The legislation passed the House of Representatives last week despite three Liberal MPs – Petro Georgiou, Judi Moylan and Russell Broadbent – crossing the floor to vote with the Opposition.

Mr Howard insisted yesterday that the Government was not attempting to appease Indonesia. "I think our relationship with Indonesia will remain soundly based no matter what happens," he said. "This is not something that is crucial to the relationship with Indonesia."

However, he conceded at that stage there was a serious prospect that the legislation would be defeated. "Well, I think we can all count," he said. "Any government senator crossing the floor will kill it, and if two government senators were to abstain, that would kill it as well."

Senator Fielding has in the past voted with the Government on issues such as the introduction of voluntary student unionism last year. Yesterday he dismissed the migration legislation as "ludicrous", saying he also had concerns over the Government's decision to change the rules for asylum-seekers when it suited them.

"What is at the essence being proposed by the Government is, 'We don't like the rules any more'," he told the Nine Network's Sunday program. "That's not fair. We expect everybody else to play by the rules, not booting people off willy-nilly."