The Federal Government wants to extend a controversial $423 million contract for security firm Paladin on Manus Island.

Paladin's contract was the cause of much consternation when it was announced earlier this year, with questions asked about the capability of the little-known firm.

The deal expires on June 30, and is currently under review by both the Auditor-General and the Home Affairs department.

Mr Dutton said in an interview with the ABC on Sunday that “the likely arrangement is that there will be a continuation”, but would not give any further details.

Mr Dutton’s department recently extended a similar services contract for the detention centre on Nauru, with Brisbane firm Canstruct International paid an extra $120 million to extend its contract to July 31, leaving it total value at $711 million.

It is believed that the department will opt for a short-term extension to the Paladin contract, allowing the government time to address the growing mound of concerns raised.

But Papua New Guinea says it does not want Paladin on the island.

“[The] PNG Government's position is to … terminate the Paladin contract by the end of this month,” PNG Immigration and Border Security Minister Petrus Thomas said.

“[The PNG Government] wants a transparent tender process.”

Paladin's contract came under intense public scrutiny after reports that the virtually unknown security firm won the $20-million-a-month contract without a competitive tender.

One of Paladin’s local directors, Kisokau Powaseu, was arrested on charges of fraud and money laundering in January; the same month that the company was granted a $109 million extension.

The Government is currently paying over $1600 a day to house each refugee on Manus, not including food and welfare services, which is more that twice of putting them up in suites at the Shangri-La hotel in Sydney.

Experts estimate that Paladin is making about $17 million in profit each month from the contract.

Mr Dutton says the contract is “an issue for the department”.

“They've obviously got people on the panel, they've obviously got contracting arrangements and they'll look at the history of those people who are applying, they'll look at the suitability for them to provide services, and they will make judgements based on that,” he said.

“I don't want to spend money on Manus and Nauru, I don't want people there. I want them off as quickly as possible.”

Mr Dutton also gave an update on the the resettlement deal between former leaders Malcolm Turnbull and Barack Obama, which was designed to see 1,250 people resettled in America.

Mr Dutton said 531 people have been resettled and approvals have been granted for a further 295, but over 300 have been rejected, making it unlikely that the full quota of 1,250 will be reached.

In exchange, Australia has taken just two people – a pair of Rwandan men accused of murdering eight people.

Rwandans Leonidas Bimenyimana and Gregoire Nyaminani had confessed under torture to the 1999 murders of a group of tourists including Americans, Britons and New Zealanders with machetes and axes on a beach in Uganda.

A US judge threw the confessions out of court because they were extracted under torture, leaving the men in limbo.

They have now been relocated to Australia as “humanitarian” entrants under immigration law.

“We don't have plans to bring any others from America at this stage,” he said.