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Four Pacific Islands leaders arrive in Vanuatu amid political crisis

By Kirsty Needham

SYDNEY (Reuters) -Four Pacific Islands leaders arrived in Vanuatu on Tuesday to consider declaring a "neutral" position amid an intense contest between the United States and China, against the backdrop of a political crisis in the host nation.

The leaders of Vanuatu, Papua New Guinea, Solomon Islands, Fiji and New Caledonia's ruling FLNKS party, members of the Melanesian Spearhead Group (MSG), will meet for two days from Wednesday at the National Convention Centre, officials said.

Vanuatu Deputy Prime Minister Matai Seremaiah, speaking after a meeting of foreign ministers on Monday, said the leaders would consider declaring a "region of peace and neutrality".

The five nations, strategically located in the South Pacific and pivotal during World War Two, are again at the centre of a geopolitical contest: Solomon Islands has a security pact with China, Papua New Guinea signed a defence cooperation deal with the United States, while Fiji last week co-hosted an Indo-Pacific defence chiefs conference with the U.S., which China attended.

Vanuatu's Prime Minister Ishamel Kalsakau has faced a political backlash for signing a security deal with Australia, after some lawmakers feared it could upset China, a major infrastructure lender.

Kalsakau narrowly survived a no-confidence motion in parliament last week, but his government has lost a working majority.

The Melanesian Spearhead Group was formed four decades ago to push for independence for indigenous Melanesian groups, and its new headquarters in Vanuatu was funded by China.

The leaders would consider a "proposed declaration on MSG region of peace and neutrality aimed at advancing the implementation of the MSG Security Initiative to address national security needs in the MSG region," Seremaiah said, in comments reported by the Vanuatu Daily Post on Tuesday.

A Vanuatu official told Reuters it was expected the declaration of neutrality will be adopted by the leaders. A Papua New Guinea government spokesman said "wait and see tomorrow".

Graeme Smith, a senior fellow in the department of Pacific Affairs at the Australian National University, said the ideal of neutrality pre-dates the geopolitical contest between China and the U.S., and was "a big part of national identity" in Vanuatu.

"China's increasing presence, as with the Soviet Union's increasing presence in the 1980s, puts the doctrine under pressure," he added.

The region's main diplomatic bloc, the 18-member Pacific Islands Forum, which includes Australia, last year rejected a push by China for 10 nations to sign a security and trade deal, amid concerns the region needed to stay united on the issue.

The MSG Secretariat said this year the sub-regional group of five nations should consider security cooperation with China. Smith said it was new ground for the MSG to consider a security declaration.

Whether to accept a West Papuan independence group as a member - a move opposed by Indonesia - will be another major topic for debate, a Vanuatu official said.

The Solomon Islands said Japan's plan to start releasing more than 1 million metric tonnes of treated radioactive water from the wrecked Fukushima nuclear power plant on Aug. 24, would also be discussed.

(Reporting by Kirsty Needham; Editing by Michael Perry and Bernadette Baum)