Prime Minister Anthony Albanese’s plans to sign a sweeping $500 million security and economic agreement with Vanuatu have been dealt a blow in a setback for Australia as it fiercely competes with China for influence in the Pacific.

Albanese had hoped to kickstart a major fortnight of Pacific diplomacy by signing the long-awaited deal with his Vanuatuan counterpart during a visit to the capital of Port Vila, but he revealed before departing that he did not believe the agreement would be finalised on Tuesday.

“I wouldn’t expect that it will be signed today, but what we will do is to progress it today to have that conversation,” Albanese told ABC radio, adding that Vanuatuan politics can be “very complex”.

“I’ll be meeting with Prime Minister [Jotham] Napat today, and we have committed to

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