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Of the 39 people who were on board, 27 have been rescued and three have been confirmed dead but the bodies of two are yet to be recovered from the water.
Nine people remain missing - two of which are 13 and 14 - and a 15-year-old is among survivors.
The survivors are on board the commercial vessel the LNG Pioneer and will be taken to Christmas Island at a later stage.
Mr O'Connor has told Radio National that the search is continuing but once it is light a decision will be made on whether to stop.
"The appropriate authorities look at the survivability of those that are yet to be recovered. It would appear that if there is in fact no hope when it's light they'll proceed to Christmas Island," he said.
Mr O'Connor said he has not yet had official confirmation that the Sir Lankans are seeking asylum but if they are they will be assessed on Christmas Island.
Political debate
In the wake of the disaster, the Federal Opposition has warned that Prime Minister Kevin Rudd's border protection policy was destined to put more lives at risk.
Opposition Leader Malcolm Turnbull says he will put in place policies that will stop people smugglers heading to Australia.
"Every Australian government's policy should be to secure our borders and ensure that people smuggling does not occur and there are no, or as few as possible, unauthorised maritime arrivals of asylum seekers," Mr Turnbull said.
The comments follow the latest Newspoll, which shows the electorate is losing faith in Mr Rudd's handling of the asylum seeker issue.
The Government's primary vote was down seven points to 41 per cent, putting it on equal footing with the Coalition, which jumped seven points from its 34 per cent rating two weeks ago.
The slump was also reflected in the two-party preferred polling results.
In the last poll, Labor had an 18-point lead over the Coalition - that has now been narrowed down to just four points, with Labor on 52 per cent and the Coalition at 48.
Mr Rudd also slipped by two points to 63 per cent in terms of preferred prime minister.
But Mr Rudd has refused to back away from his policy stance.
"What the Government is doing is ensuring that it implements its tough, responsible but fair policy - the one that we took to the people prior to the last election - and it's the one which serves Australia's long-term interests," Mr Rudd said.
"It's tough and hardline on people smugglers. It's humane on asylum seekers. That is a responsible policy in the national interest."
Australian Broadcasting Corporations
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