The Solomon Islands prime minister Manasseh Sogavare has rejected allegations that he misappropriated more than 640 thousand US dollars.
The allegation was levelled at him by the sacked minister of infrastructure Jimmy Lusibaea last week.
He said Mr Sogavare bought an old boat worth less than 25 thousand US dollars when the funds were supposed to go towards purchasing a passenger and cargo vessel for the prime minister's constituency in Choiseul Province.
Mr Lusibaea called for an investigation into what Mr Sogavare had done with the rest of the money.
But in a statement, Mr Sogavare said the money had never come to him but been given straight to Lauru Shipping Ltd - a company owned by Choiseul Province.
He said the company and the province put careful consideration into their purchase of the vessel with the shipping grant funds.
Mr Sogavare said the vessel had undergone extensive repairs and upgrades in the Philippines and was almost new.