The Papua New Guinea Government is working to repair relations with the World Bank after the cancellation of the launch of the agency's Forestry and Conservation Scheme.
The World Bank says the project is at the heart of its relationship with PNG.
But on the eve of the Bank's annual meeting in Washington, the PNG National Forest Service cancelled a workshop at which the 40 million US dollar scheme was to be launched.
The cancellation is particularly embarrassing for PNG which has sent a Ministerial delegation to the meeting to ask for further aid.
Our correspondent in PNG, Peter Niesi, says the Forest Service has explained why it forced the cancellation.
"According to the managing director, David Nelson, they had pulled out. Basically they had asked for the workshop launch to be postponed in order for the government to mount some of the things that had already been negotiated. Mr Nelson's reasoning was that the negotiations were done by the previous government and he thought the new government should be given the opportunity to suggest any changes, should they require them."
