Indonesia's government has banned the Netherlands-based Catholic development agency Cordaid from operating in Papua region.
The Jakarta Post reports that Cordaid has operated in Papua for over three decades, assisting Papuan NGOs and local people with a focus on social development and economic empowerment for the poor.
However Indonesia's Ministry of Social Affairs has refused to renew the agreement under which Cordaid has been in Papua after it expired in April.
The Ministry has voiced suspicions about the agency's exchange programme between Papua and the Philippines' restive southern region of Mindanao.
The programme promoted participation of women in development projects.
The Government suspects Cordaid is supporting separatist elements although the agency denies this.
However the prominent human rights lawyer Totdung Mulya Lubis says the decision was taken "too hastily" and without sufficient evidence.
Lubis says that to stop foreign social funding is akin to killing off Papua-based NGOs, which almost entirely depend on overseas funding.