Papua New Guinea's Cabinet will meet today to consider its response to Australian government plans to control the distribution of aid to Port Moresby.
Australia's Foreign Minister, Alexander Downer, had been due to visit PNG this week but the visit was postponed while Port Moresby considered the proposals put forward by an Australian envoy.
PNG's Prime Minister, Sir Michael Somare, is said to be furious at plans to insert Australian public servants into government departments to monitor aid spending.
He was also rebuffed over his suggestions that PNG public servants should serve in Australian government departments to instill appropriate work ethics and financial management skills.
PNG's Chief Secretary, Joshua Kalinoe, is likely to deliver Port Moresby's response to the Australian proposals in Canberra on Wednesday.