A group of Chinese nationals rescued from a stricken yacht will now seek asylum in Australia after abandoning their quest to sail to New Zealand, a minister said Wednesday.

The 10 Chinese, including two children aged six and eight, are mostly members of the outlawed Falungong spiritual movement.

Authorities had feared that the group would persist with plans to make the treacherous boat journey to New Zealand -- a distance of some 2,775 nautical miles -- to seek asylum there.

Immigration minister Chris Bowen said he was pleased the group had decided to stay.

"I obviously think that's a good outcome, as it means they won't be yet again taking another further dangerous boat journey," he told ABC TV.

"We'll now process them in the normal way. They'll be processed for their asylum claim, security checks will begin."

The group reportedly set off from Malaysia a month ago and called for help in Australian waters after running out of fuel and supplies.

They were rescued on Thursday and helped to reach the northern city of Darwin, where they have been sleeping at the ferry terminal.

Prime Minister Julia Gillard had said Tuesday she had no power to stop them from pressing on with their journey to New Zealand but authorities voiced concern for the group's safety.

The United Nations High Commissioner for Refugees also said it would be too dangerous for the group to attempt to cross the Tasman and advised them to apply for asylum in Australia.

"Both legal systems are pretty well the same," regional representative Rick Towle told the ABC. "Both countries have signed the convention."

A spokesman for the Falungong in Australia, William Luo, said the group had intended to go to New Zealand to seek asylum because they knew they faced mandatory detention in Australia while their refugee claims were assessed.

He said they had been terrified of being locked up after bad experiences in China but had changed their minds after their treatment by Australian officials.

Falungong -- a movement loosely based on Buddhist, Taoist and Confucian philosophies -- enjoyed growing popularity among the Chinese in the 1990s but China outlawed the movement as an "evil cult" in 1999.

The group says its members are tortured for their beliefs.