Australia rejected accusations that it is a regional bully as the Pacific Islands Forum summit got underway in Nadi today.
The Papua New Guinea Prime Minister Sir Michael Somare, the outgoing chair of the Forum used the formal opening to accuse Australia of being insensitive in its actions.
This follows last week's raid by police on the office of the Solomon Islands leader Manasseh Sogavare.
Sir Michael said the office raid , which he described as an "incident in Honiara", threw serious doubt over the Australian-led regional assistance mission, or RAMSI.
He says the gradual erosion of respect for sovereignty of nations should not be allowed to fester.
But the Australian Prime Minister John Howard is adamant Australia will remain at the head of RAMSI, describing it as a model that could be used elsewhere in the Pacific, and stood by his warning that Australia's aid money came with conditions attached.
He says it is not arrogant to want Australia's money to be spent wisely.
Mr Howard says it is almost laughable to suggest Australia is behaving like a bully.