Australia has refused to say whether it will pay Nauru a new visa fee for a lone Iraqi refugee on Nauru who Canberra regards as a security risk.
The Iraqi man, Mohammed Sagar, was sent to Nauru by Australia more than five years ago with hundreds of other asylumseekers who all have been processed and settled.
The 29-year-old man has been classified as a refugee, but no country wants to take him and he no longer has a valid visa.
Nauru increased his visa fee, believed to be 75,000 US dollars a month, but Australia is challenging Nauru.
Australia's foreign minister, Alexander Downer, says there are ongoing talks with Nauru about this but not in public.
Mr Downer also says Australia is sensitive about security.