1205 GMT August 15, 2022
The idea of "offshoring" people is being looked at but finding a suitable location would be key, a source said, BBC News reported.
UK Home Secretary Priti Patel asked officials to look at asylum policies which had been successful in other countries, the BBC has been told.
The Financial Times says Ascension Island, more than 4,000 miles (6,000km) from the UK, was a suggested location.
The Foreign Office is understood to have carried out an assessment for Ascension — which included the practicalities of transferring migrants thousands of miles to the island — and decided not to proceed.
However, a Home Office source said ministers were looking at "every option that can stop small boat crossings and fix the asylum system."
"The UK has a long and proud history of offering refuge to those who need protection. Tens of thousands of people have rebuilt their lives in the UK and we will continue to provide safe and legal routes in the future.
"As ministers have said we are developing plans to reform policies and laws around illegal migration and asylum to ensure we are able to provide protection to those who need it, while preventing abuse of the system and the criminality associated with it."
No final decisions have been made.
Labour's shadow home secretary, Nick Thomas-Symonds, said, "This ludicrous idea is inhumane, completely impractical and wildly expensive — so it seems entirely plausible this Tory government came up with it."
Alan Nicholls, a member of the Ascension Island Council, said moving asylum seekers more than 4,000 miles to the British overseas territory would be a "logistical nightmare" and not well received by the islanders.
He also told BBC Radio 4's Today program that the presence of military bases on the island could make the concept "prohibitive" due to security concerns.