Kiribati has asked Australia for assistance to help clarify plans put to it by a foreigner who suggested setting up a flight training school on the atoll of Fanning.
The man, Wolfgang Bohringer, is linked to one of the suicide pilots of the 9/11 attacks on New York.
Mr Bohringer, reportedly a US citizen of German origin, has left Kiribati on his yacht, leaving questions about his intentions.
He is said to have held talks with the Kiribati President Anote Tong, who was sceptical about his development plans as Fanning Island has no phones and no functioning airstrip.
The plan has fuelled speculation that it could be a terrorist plot because Fanning is relatively close to the US state of Hawaii.