REPORTER: David O’Shea

It's the last night of the Pacific Islands Forum in Tonga and for delegates weary of discussing trade and politics, time to unwind. In many ways this has been an extraordinary forum, its biggest achievement, getting Fiji coup leader Commodore Bainimarama to agree to a timetable for the return of democracy. But while the Australians and New Zealanders did everything they could to avoid him, the coup leader was treated like a rock star by everyone else.

Two days earlier, there was an awkward diplomatic moment en route to a retreat for the Pacific Islands leaders. Australian Foreign Minister Alexander Downer is clearly uncomfortable when Bainimarama appears behind him. But because of problems with Tonga's plane, Downer has decided to offer him a ride on the RAAF's Hercules.

On the island of Va'vau, a traditional Tongan welcome. Australia has dominated this region for years, and many here accuse it of bullying. Later in the Forum there will be an aggressive push into the Pacific by new players. But for now, Australia's focus is on Fiji's recalcitrant coup leader. Commodore Bainimarama is not saying a thing at this stage.

REPORTER: Excuse me sir, will you be speaking to the media at all while you are here?

BODYGUARD: There is no question time, you can take images but no questions, OK?

REPORTER: But will he be talking before the end of the conference to the media?

BODYGUARD: It's up to him. If he does you will be informed.

Australia's Foreign Minister later explained why he felt he had to give the coup leader a lift on the 'Hercules'.

REPORTER: It would be a first for the 'Hercules', wouldn't it, having a coup leader on board?

ALEXANDER DOWNER, AUSTRALIAN FOREIGN MINISTER: Silly. We took all of the leaders and obviously it's not a reality, it would have been petty in the extreme and reflected badly on Australia if I had then stopped and boarded the plane and sent that man off.

But although Downer wanted to avoid a diplomatic snub, along with New Zealand he's accused Bainimarama of blocking the so-called road map to democracy in Fiji.

COMMODORE BAINIMARAMA: I don't know why you people getting all these lies about a roadmap. People keep telling me, we want to see a concrete path that needs to be done to prepare us for election.

BODYGUARD: Sir, I think we have to go, you are blocking the road.

COMMODORE BAINIMARAMA: I am sorry, see you guys later.

With the exception of Fiji, political reform was not a big issue at this year's Forum. Far more significant was a massive cash injection from some new friends. A day after Alexander Downer's early departure the European Union pledged a total $440 million over the next five years. By far the biggest amount went to Australia's former colony, Papua New Guinea, over $220 million.

LOUIE MICHEL, EU COMMISSIONER: I am very happy to be in very high level company with all these people coming from our member states, so, chin chin.

Europe's new generosity has enormous implications for Australia's influence in this vital region.

REPORTER: That's quite a sum of money that Papua New Guinea gets from the Europeans?

SIR MICHAEL SOMARE, PNG PRIME MINISTER: Yes, it's quite a sum of money.

REPORTER: Is that a massive increase from previous years?

SIR MICHAEL SOMARE: Yes, it's a massive increase on previous years.

PNG's Prime Minister Sir Michael Somare must be happy to have the Europeans on board, especially when relations with Australia have been so frosty. He'll be closely watching the outcome of the federal election.

REPORTER: Have you met Mr Rudd?

SIR MICHAEL SOMARE: Yes, I know Kevin very well.

REPORTER: And how do you'd get on, if he was prime minister?

SIR MICHAEL SOMARE: Well, normally the socialists get together well.

REPORTER: Are you a socialist?

SIR MICHAEL SOMARE: No, I am not a socialist.

MAN: He says he is a fiscal conservative.

SIR MICHAEL SOMARE: He's a fiscal conservative and I am very conservative too.

Although Canberra provides PNG with over $350 million in annual aid, the EU Commissioner Louis Michel has what can only be interpreted as a dig at the way it's given.

LOUIE MICHEL: The new approach is that we have to change the model of development based to my opinion, from a very archaic, maybe neo-colonialist approach, of donor beneficiary to a pure political relationship. That's very important, they have to tell us and they have also things to tell us and learn us. We are not in the '50s, we are not in the '60s we are in 2007. Time is now to trust a little bit the people and also to be honest with them and recognise they have also the right sometimes to make errors in our countries, sometimes governments make errors too.

In recent years there have been allegations of chequebook diplomacy by China and Taiwan, but Louis Michel says China has the right to muscle in.

LOUIS MICHEL: We know that they maybe don't have the same ethic model as ours, I don't judge them on it I only say, that's new money, that maybe it's additional money. Well, the partners need additional money so let's come China, Brazil, Japan, let's come everybody who want yeah, everybody why not? Everyone who wants to give money is welcome.

This financial free-for-all must be a worry to Canberra, once the only significant benefactor in the region.

SIR MICHEL SOMARE: We accept all the investment in PNG and China just happens to be one of them, like Japan. Japan too made a commitment to the Pacific and to all of us, Japanese aid, Chinese and Australia are almost neck to neck.

And Europe was not the only newcomer at this year's Forum. As unlikely as it sounds, oil-rich Venezuela also sent a delegation. The government of Hugo Chavez has always used cheap oil to pursue foreign policy goals, now it's turning its attention to the Pacific. Vladimir Villegas is a vice-minister from the Ministry of Foreign Affairs.

VLADIMIR VILLEGAS, (Translation): Obviously, oil is a gift from nature, an advantage nature gave us… and we can use it in a selfish manner or we can use it in a responsible manner. It is a political decision we have made. We want to maintain and extend our presence in the pacific as in every other corner of the planet we want to have relations with the whole world.

Once a backwater, the Pacific nations now have suitors to rival Australia. Tongan Prime Minister Feleti Sevele knows very well why everyone wants a foothold in the Pacific.

FELETI SEVELE, TONGAN PRIME MINISTER: Of course the Pacific is becoming globally important the waters of the Pacific, the votes in the United Nations, so..

REPORTER: What does it mean for Australia and NZ?

FELETI SEVELE: Well, Australia continues to be a very traditional, good neighbours, and good donors and we will not diminish their interest nor their influence in the Pacific, nor the importance of our relationship. If anything, it might make it closer, it might force them to look at issues they might not have looked at in the past.

For the first time Australia faces real competition for influence in its own backyard.

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