The Australian Foreign Minister Alexander Downer is reported to have tried unsuccessfully to cancel a speech by his Papua New Guinea counterpart Sir Rabbie Namaliu in Port Moresby.
In his speech, Sir Rabbie criticised Australia for being unaware of his government's efforts in addressing governance concerns.
The request to stop the meeting by Mr Downer was delivered to the Foreign Secretary Gabriel Pepson by Chief Secretary Joshua Kalinoe after the speech was over.
The National newspaper reports that high level sources say Mr Downer is feeling the heat from PNG leaders and wants no further public debate on the aid issue ahead of his visit to Port Moresby next week.
In his speech, Sir Rabbie said the aid debate should not be sidetracked by unsubstantiated claims of corruption and misuse surrounding the total aid program.
He said that Australian concern about corruption in the aid process is a red herring because if corruption is occurring then it is because AusAID and its managers are not preventing it.
Sir Rabbie said that while good governance is already included in the agreed funding priority, he is not sure leaders in Canberra are fully aware of it.