(Re-edits 2nd paragraph)

By Rob Taylor

CANBERRA, Feb 8 (Reuters) - Australia ended on Friday its controversial policy of sending asylum seekers into often-lengthy detention on small Pacific island nations, with the last refugees leaving Nauru to live in Australia.

Prime Minister Kevin Rudd, who won victory for centre-left Labor in November, fought the election on a pledge to end the heavily-criticised "Pacific Solution", introduced by the former conservative government in 2001 to turn back boatpeople after almost 5,000 arrived the year before.

"This is the end of a long and fairly painful chapter in Australian asylum policy and practice," said Richard Towle, the regional head of the United Nations High Commissioner for Refugees (UNHCR).

Former Prime Minister John Howard introduced the policy in late 2001, splitting the nation between critics and supporters, after a standoff 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 en route to Australia.

During the next six years, more than 1,300 asylum seekers were processed on Nauru, while others were sent to Manus Island in Papua New Guinea in return for millions of dollars in aid from Australia's government.

But the policy was criticised by the UNHCR and Amnesty International, who both accused Australia of breaching its responsibilities under international refugee conventions.

Rudd's Labor said the policy had wasted more than A$300 million ($268 million) since its introduction and shut the door on it with the departure of 21 Sri Lankan refugees for settlement in Australia.

"We're delighted that Nauru finally will have no more refugees on it from now on," the UN's Towle told local radio.

Canberra said it would retain a tough border policy through a purpose-built detention centre on remote Christmas Island, in the Indian Ocean between Australia and Indonesia.

Nauru's cash-strapped government has asked Australia to increase aid to make up for the blow to its economy caused by the loss of income from the detention centre. ($1=A$1.12) (Editing by Alex Richardson)

AlertNet news is provided by