The Australian government was Thursday desperately working to salvage its asylum-seeker policy as it braced for a spike in boatpeople out to capitalise on its devastating court defeat. The High Court on Wednesday scuttled Canberra\'s plan to send asylum-seekers to Malaysia -- a key plank of its regional response to halting the flow of thousands of boatpeople arriving on its shores each year. It was a huge embarrassment for Prime Minister Julia Gillard and her fragile Labor government that had heralded it as a sure-fire strategy for smashing the people-smuggling trade. \"We are going to study this High Court decision, but nothing in it is going to diminish our resolve to break the people smugglers\' business model,\" Gillard said in brief comments on the issue. Her cabinet was expected to meet Thursday evening to discuss their next move. The nation\'s top court found that under Australian law the government could not send asylum seekers to be processed in another nation unless that country was compelled to adequately protect them. Malaysia is not a signatory to the UN convention on refugees and rights groups had accused Australia of abandoning its international obligations to asylum-seekers by dumping them in a country without proper protection. The court ruling could have broader ramifications for offshore processing, including Australia\'s plan to send asylum-seekers to Papua New Guinea and the possibility of re-opening a detention centre on the Pacific island of Nauru. \"Legal advice is needed whether or not they are available to any government,\" said cabinet minister Stephen Conroy. People-smugglers appeared ready to exploit the court setback with several local reports suggesting boats bound for Australia were preparing to depart Indonesia in the next few days. The Daily Telegraph cited a naval source as saying \"there will be a spike in the next four to eight days\". The Australian quoted refugees in Malaysia predicting a tide of departures within the coming weeks. Immigration Minister Chris Bowen admitted there could be a rush heading to Australian shores. \"I think you can expect people smugglers to be capitalising on this arrangement and to say that, \'You can come to Australia now because the Malaysia agreement has been ruled invalid by the High Court,\'\" he said.