Vanuatu has given Australia 24 hours to close the Australian Federal Police Liaison Office at its High Commission in Port Vila in response to Australia's treatment of the Vanuatu prime minister last month.
The foreign minister, Alfred Carlot, has also asked Australia to explain why its protocol officers and police departed from their obligation to ensure Sato Kilman's smooth transfer through Sydney on his way to Israel by insisting on arrival cards and customs clearance.
After Australia's apparent refusal to apologise, Mr Carlot says should Australia defy the order, its police officers in Vanuatu will be arrested.
"The government has now advised the High Commission of the Vanuatu government's decision to close down within 24 hours the Australian Federal Police, AFP, Liaison Office based at the High Commission and the immediate closure of all AFP operations in various government law enforcement agencies in Vanuatu."
Alfred Carlot says the government decision is not linked to the arrest in Sydney of Mr Kilman's advisor Clarence Marae who was accused of being involved in an international tax scam.