The World Bank's motives are being questioned by Papua New Guinea's forestry industry after revelations of plans to replace the country's National Forest Board with international consultants.
A Government official suggests the actions of the Bank amount to interference in PNG's sovereignty and that a Bank official is trying to blackmail the country into implementing its Forest Conservation Project or FCP.
As part of its FCP, the World Bank wants to establish an international consultancy board to assume the role of PNG's National Forestry Board.
The Bank has also threatened to withdraw its financial aid to PNG if the government does not reverse its approval for new timber projects next year.
The Executive Director of the Forest Industry Association, Robert Tate says under the FCP thousands of people would lose their jobs and local logging operations would close down.
Mr Tate says there are questions over the World Bank's "green" allegiances at the cost of Papua New Guineans.
"What are the motives of the board and in who's interest are they acting. The World Bank superboard would comprise WWF, Greenpeace, Nature Conservancy and Conservation International without any government representation, without industry representation."
Robert Tate of PNG's Forest Industry Association
The PNG government is also opposed to World Bank demands for a forest inventory.
The PNG - World Bank fallout comes after the government recently asked the financial institution for funds to help finance its budget.