The Autonomous Bougainville Government says its recent decision to re-arm its police has eased the tension in the south of the Papua New Guinea province.
The money scam operator, Noah Musingku, aided by five former Fiji soldiers, has allegedly been fostering dissent in the south of Bougainville Island.
Last month, people associated with him attacked police and destroyed some government buildings.
That prompted the ABG to re-arm its police and announce it would employ 30 former combatants as special constables.
The ABG vice president, Joseph Watawi, says the move compelled an improvement in the behaviour of the rebels led by Mr Musingku.
"With that decision, the government demonstrated it is serious in restoring the peace and that the government is also serious in terms of resourcing its law enforcement agencies to deal with the situation..."