An asylum seeker baby currently staying at a hospital in Brisbane will be moved to community detention, but could still end up being returned to Nauru, Immigration Minister Peter Dutton says.

Baby Asha’s doctors at Brisbane’s Lady Cilento Children’s Hospital had refused to release her until a suitable home environment was identified, fearful she would be returned to the island immediately.

The one-year-old received treatment for burns she suffered from boiling water while in detention, with her plight triggering a rally of asylum-seeker advocates outside the hospital lasting more than a week.

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On Sunday, Mr Dutton said the baby would be released into community detention.

“That’s what we’ve proposed all along,” he insisted.

“But at some point, if people have matters finalised in Australia, then they will be returning to Nauru, and that’s exactly the same treatment that we’ve applied equally.”

Mr Dutton claimed doctors had advised the child’s treatment was over and they were happy for her to be released into community detention.

Immigration Minister @PeterDutton_MP has addressed media in #Brisbane regarding the Baby Asha case https://t.co/EJrJP5hk3M

— ABC News (@abcnews) February 21, 2016

The minister faced questions about why medical staff were not satisfied enough to discharge the patient sooner, at one point suggesting bed shortages were to blame for the change.

He refused to provide information about when or where the baby would be moved, citing operational security, but the hospital later advised she would be discharged within 24 hours.

“The (Immigration) Department advised that there is no imminent plan for the family to return to Nauru and the family’s case is under consideration,” Children’s Health Queensland chief executive Fionnagh Dougan said.

Greens immigration spokeswoman Sarah Hanson-Young welcomed the decision, saying the minister buckled to pressure from medical staff and protesters.

“Peter Dutton can do it for one child, he now must do it for the rest of them,” she told reporters in Adelaide.

Asylum-seeker advocates gather outside Brisbane’s Lady Cilento Children’s Hospital in support of one-year-old baby Asha. Photo: AAP

Mr Dutton said the number of children in detention on mainland Australia had dropped from 8000 when Labor was in government to around 80.

He said the government’s policy had not changed – that refugee families could remain in Australia while their “medical and legal matters” were finalised, but would then be sent back to their country of origin.

“If people then don’t want to go back to their country of origin, then they go back to Nauru,” he said.

Natasha Blucher, former Nauru detention centre caseworker and family advocate, said Asha’s mother was relieved.

“This last week has been incredibly stressful and all she has sought is to be able to live in the community like everyone else,” she said.

Australian Medical Association president Brian Owler had warned the baby’s forced removal would have represented a point of no return in the asylum-seeker debate.

“It’s a line that cannot be crossed. If crossed, there is no return,” he said.

Shen Narayanasamy, human rights director at lobby group GetUp!, called the outcome an “incredible victory”.

“Mr Dutton’s decision essentially concedes that Nauru is completely unsuitable for any human being, and the position of doctors on this subject is the final word,” she said.

-AAP