New Zealand's Foreign Minister says he has suspended the country's aid to Nauru's justice sector because of ongoing concerns about civil rights abuses.
New Zealand had been giving Nauru US$760,000 annually, paid out quarterly.
Murray McCully says there have been several incidents which have caused him concern, including the removal of senior members of the judiciary, and the suspension of most of the country's opposition MPs.
There has also been widespread criticism of new laws that restrict freedom of expression and assembly, as well as restrictions on internet access and social media.
He says he previously met with the Justice Minister, David Adeang, and other ministers from Nauru and received assurances that they intended to remedy the problems and restore international confidence.
"We agreed to go forward with our funding on that basis. Now, I've reminded them of the obligation that they've entered into with us at that time, I've made it clear that some of the actions that have taken place recently we regard as being incompatible with those assurances."
Mr McCully says there are a range of other matters regarding human rights and the general operation of the justice system that have caused the New Zealand government concern.
"I've made it clear that we are very reluctant to take our funding away, we're reluctant even to place it on hold. But where the system we're funding is essentially part of the problem rather than part of the solution, we don't have much choice."
He says the ball is now in Nauru's court and he will continue to work with its governent to reach a point where the funding can be resumed.
Kun says move is 'disappointing'
One of the suspended MPs, Roland Kun, says it's disappointing that New Zealand has been forced to suspend the aid.
Mr Kun was suspended from parliament almost 15 months ago for questioning the actions of the government, and three months ago his passport was seized, stopping him from returning to his New Zealand-based family.
He says it is unfortunate but inevitable given the Nauru Government's failure to respond to New Zealand's concerns.
"New Zealand is the biggest donor partner who is assisting us with the strengthening of our justice system here on Nauru, so New Zealand does have great interest in what is happening in the justice sector. That the government of Nauru has failed to satisfy New Zealand in terms of the pursuit of their shared objectives of strengthening the justice sector on Nauru is very disappointing."