Japan has held back more than 7.7 million US dollars in aid money it had approved for the University of the South Pacific's IT project.
Radio Fiji reports that this is because the Fiji government has not yet paid back to Japan millions of dollars in aid money it had spent on the failed Lami Jetty project.
The jetty project was cancelled by the prime minister last year in the face of overwhelming protests from Lami residents after Japan had already spent most of the money on the advice of the then minister for fisheries, Konisi Yabaki.
Japan then demanded that Fiji repay the money it had already been spent on the aborted jetty.
The vice chancellor of the USP, Dr Anthony Ashton-Tarr, says the government is expected to factor into the 2007 budget to be presented next month the money that has to be reimbursed to Japan.
Dr Ashton-Tarr says once Japan is refunded the money by the Fiji government, it will release the funds earmarked for the USP's IT project which has now been delayed for a year.