Liberal European Union (EU) leaders have attacked Austria for proposing the creation of asylum centres located outside the bloc to help solve the migrant crisis.

Sebastian Kurz, Austria’s Minister for Foreign Affairs and Integration, and his coalition government want to completely overhaul the EU’s migrant policy by only permitting asylum applications from outside EU borders.

Mr. Kurz told German magazine Der Spiegel at the end of last year that migrants should be stopped before they enter Europe and brought “into another safe area outside Europe”

“I have warned a year and a half ago that the refugee routes can also be used by terrorists, which unfortunately proved to be right,” he added.

The 30-year-old Foreign Minister renewed his demand this week, telling Bild he wanted to see the establishment of “asylum centers” in North Africa or the Middle East.

Austrian Foreign Minister Sebastian Kurz speaks during the party congress of the German Christian Social Union Party (CSU) in Munich, southern Germany, on November 4, 2016. (CHRISTOF STACHE/AFP/Getty Images)

However, Luxembourg’s Foreign Minister Jean Asselborn hit back this week, telling Der Spiegel on Friday that “the idea of penning in refugees on a rented island outside the EU belongs, for me, to a right-wing national line of thinking.”

He also praised German Chancellor Angela Merkel for her open door policy and promise to admit “no upper limit” of migrants to her country. “Merkel’s welcome culture was right”, he said.

The rejection of Austria’s plan comes on the same day the EU’s own border agency revealed that just 42 per cent of failed asylum seekers and economic migrants, who have no right to remain, are deported from the Europe.

Meanwhile, Austria’s defence minister has also reportedly drafted a plan to establish a cap on the number of migrants allowed to apply for asylum from outside the EU, Bild reported on Thursday.

Hans Peter Doskozil, a Social Democrat, told the newspaper the changes were urgently needed to create a more orderly system of legal migration for those entitled to asylum in the bloc.

“It’s about ending the failed European asylum policies. We must admit to ourselves and be honest that the EU has limited capacity to absorb more migrants. We must stop illegal immigration,” he told the paper.