It is understood that while payments have been made in the past for other reasons involving disrupting people smuggling and infiltrating criminal networks, the payment a month ago was the first to turn back a boat.

Multiple senior sources have now confirmed the payment took place, as reported by Fairfax Media earlier this month.

An Australian official, believed to be from the intelligence agency ASIS, gave about $US5000 each to the six crew members of a boat carrying about 65 asylum seekers after it was intercepted in late May bound for New Zealand.

The payment was part of a negotiation to get the crew to turn back to Indonesia. The asylum seekers were transferred to two new boats.

Payments to members of people-smuggling rings have been made for years under successive governments for a variety of disruption tactics including paying for intelligence and dissuading people-smuggler boat crews from setting sail.

The Senate has now launched an inquiry into the payment which will require the government to hand over documents over how the payments were made, who authorised it, and whether it was legal both domestically and internationally.

Greens leader Richard Di Natale said he hoped the inquiry would uncover where the money came from and whether foreign aid money was used by Australian officials.

"Having met with the Indonesian ambassador, the Indonesian government is very angry and disappointed about the actions of our government and this is activity that is jeopardising the relationship we have with a very important partner," he said.

Former Liberal opposition leader John Hewson, now a professor at the Australian National University, said he had never heard of such payments.

"The thing that worried me was that the government said they wanted to break the business model of the people smugglers," he said. "[But] if you start paying them to go back then you change the business model and start giving them an incentive ... It's very odd thinking."

"I'm sure there is a significant percentage of the Australian population who feels that there should be more accountability and transparency than that if you are using taxpayers' money."

Meanwhile, Indonesian Foreign Ministry spokesman Arrmanatha Nasir said the investigation into the payment was continuing irrespective of whether Australia provided further information.

"The latest information we received is that they continue to get additional witnesses or expert witnesses to strengthen the case," he said.

Mr Nasir also denied the Bali Process, an official international forum to discuss responses to people smuggling, was dead.

The Bali Process, established in 2002, is co-chaired by the Indonesian and Australian governments.

Mr Nasir said 45 countries were members of the Bali Process, not just Indonesia and Australia.

"In the context of a working group it continues, at a co-operation level it continues, in the context of capacity building it continues," he said. "So it's very far from being dead."