Australia says it wants to restore its suspended multi-million dollar aid package for Papua New Guinea, but is not dropping its insistence that PNG amend its Constitution.
Up to 160 Australian police have been pulled out of PNG over a successful legal challenge to the validity of the Enhanced Cooperation Programme, or ECP, between the countries.
Diplomatic hard-talk has been traded, with Australia saying the solution is for PNG to amend its Constitution, and PNG saying it's not about to agree to that.
Talks were held between the Australia's Alexander Downer and PNG Ministers Sir Rabbie Namaliu and Bire Kimisopa in Canberra last week.
An official in the Australian Department of Foreign Affairs says the meeting was constructive with both sides indicating a commitment to finding a solution to enable the ECP to continue.
Further meetings are to be held between officials in Port Moresby over the next two weeks.
But the Department of Foreign Affairs says a solution must be found that maintains the ECP in its present form, while preventing legal challenges, and changing the Constitution would best achieve that.