Australia has threatened to cut aid to Vanuatu because of corruption and poor governance in the country.
Australia's Foreign Minister, Alexander Downer, says the Vanuatu government has been given a diplomatic statement warning of the possible cut in Australian aid.
The statement also accused it of undermining the country's public service, interfering in the judicial system, trying to weaken the law covering financial transactions and moving to create a Prime Ministerial guard.
Mr Downer says the county's prime minister, Serge Vohor, must re-commit to core principles of good governance.
Earlier, Mr Vohor reshuffled his cabinet removing Barak Sope from the foreign affairs portfolio.
Mr Sope, who is now lands minister, says he was demoted because he opposed Mr Vohor's controversial diplomatic recognition of Taiwan earlier this month.
Mr Sope says Mr Vohor's reversal of the country's One China policy is one of the reasons why the oppostion has moved a motion of no-confidence in the government which will be debated next Thursday.
Mr Sope says some members of the cabinet don't agree with the prime minister's action..
"I think some of the actions that he's doing are not making members of the Council of Ministers happy, for instance, for allowing the Taiwanese vice-minister for Foreign Affairs to come to Vanuatu - and he's in Vila at the moment - and also not wanting to let the Taiwanese take away their flag."