Papua New Guinea's Secretary of Foreign Affairs concedes that PNG and Australia have reached a stalemate in talks aimed at rescuing a multi-million aid deal between the countries.
Australia withdrew 160 police in May after the PNG Supreme Court ruled that the immunity from prosecution they've had under the Enhanced Cooperation Programme is unconstitutional.
Talks have been under way since to resurrect the deal, but differences around the immunity issue appear to be widening, with Australia saying it's needed and PNG insisting it is not.
Some community leaders in PNG now fear that Australia will pull all its remaining 40 in-line ECP personnel out of PNG by the end of this month if a solution's not found.
Foreign Affairs Secretary Gabriel Pepson says PNG is not backing down on immunity.
He says the ECP's not in crisis, but will have to be "redesigned".
"We're saying that we should look outside of the box, that we can re-design the programme, I mean we have got a huge Australian aid programme in Papua New Guinea, which we have appreciated since our independence and we have got so many Australians in the current aid programme, so we think that we could be able to find some way around it and to have arrangements that we currently have. (Where there are Australians here who don't require immunity). We think that's the way forward and I'm sure we can be able to find some light at the end of the tunnel."
Gabriel Pepson.
