Australia’s bid to block China from gaining a security foothold in the Pacific through ports, airports and other sensitive critical infrastructure assets has been dealt a blow after Prime Minister Anthony Albanese was forced to scrap plans to sign a sweeping $500 million treaty-level agreement with Vanuatu.

Albanese hoped to kickstart a major fortnight of diplomacy in the Pacific by finalising a long-awaited deal with his counterpart during a visit to the capital of Port Vila on Tuesday, but resistance in Vanuatu meant the 10-year agreement had to be put back on ice at the last minute.

Vanuatu’s Prime Minister Jotham Napat said the key sticking point was that the pact, known as the Nakamal Agreement, could overly restrict Vanuatu’s ability to receive funding from other nations for critic

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