Australia's attempt to net a security pact with Vanuatu has hit a major snag as one of the Pacific nation's ministers flags expanded policing co-operation with China.

Prime Minister Anthony Albanese and his Vanuatu counterpart Jotham Napat were scheduled to sign a transformational security deal ahead of Pacific leaders meeting in the Solomon Islands this month.

The $500 million deal - the second attempt by Mr Albanese to formalise an agreement with Port Vila - fell over at the last minute after Vanuatu raised concerns it could inhibit assistance from third nations.

Mr Napat said there were issues around it potentially blocking other nations being able to fund the nation's critical infrastructure projects.

Australia has been working to sign exclusivity agreements across the Pacific to l

See Full Page