UPDATE 1-Australia dumps detention for all asylum seekers

(Updates with reaction, adds details)

By Rob Taylor

CANBERRA, July 29 (Reuters) - Almost seven years after Australia sent commandos onto a freighter at sea to block illegal immigrants, the government on Tuesday said it would abandon a controversial policy of jailing asylum seekers.

Immigration Minister Chris Evans, whose centre-left Labor government last year swept aside conservative rivals in power for a decade, said detention in often-remote immigration jails would now be used only as a last resort.

"Desperate people are not deterred by the threat of harsh detention. They are often fleeing much worse circumstances," Evans said in a speech at the Australian National University. Prime Minister Kevin Rudd in February kept an election promise by axing detention of asylum seekers on small Pacific island nations.

Rudd's predecessor John Howard established the policy in late 2001, splitting the nation between critics and supporters, after a stand-off involving 439 mostly-Afghan refugees blocked from landing in Australia by special forces soldiers.

The Afghans had been rescued at sea by a Norwegian freighter, the MV Tampa, after their fishing vessel sank in international waters on its way to Australia.

Howard's so-called "Pacific Solution", which included sending the navy to blockade Australia's northern coast, was strongly criticised by rights groups and the United Nations High Commissioner for Refugees (UNHCR), which accused Canberra of breaching refugee convention responsibilities.

While detention for asylum seekers and visa overstayers was first introduced by a former Labor government in the early 1990s, its hardline enforcement by conservatives created one of the world's toughest asylum regimes.