Key Points:

NUKU'ALOFA - The chequebooks have been coming out this week the Pacific Islands Forum in Tonga.

Taiwan, after announcing yesterday a further $1.5 million, in aid to Pacific countries, accused China of destabilising the Pacific and engaging in chequebook diplomacy.

A few hours later China and Tonga signed an agreement for a $74 million contribution to concessionary loans for reconstruction in the Nuku'alofa CBD, flattened after rioters torched it last year. That will seriously boost the $11 million contribution to the fund by New Zealand and Australia.

But those announcements were eclipsed by the European Union $550 million plan for Pacific Island countries over the next five years unveiled on Thursday by European Commissioner for Development and Humanitarian Aid, Louis Michel.

Taiwan Vice-Foreign Minister Katherine Chang was in Tonga to meet representatives of

the six countries that have diplomatic relations with Taiwan at the end of the forum.

At a press conference it was suggested by a senior Solomons Islands journalist that some of the other forum leaders believed Taiwan was trying to destabilise the forum by hosting Solomon Islands Prime Minister on a state visit during the forum.

She denied the claim.

Four of the five absences at the 16-members are by countries that recognise Taiwan,

including the Solomon Islands, and Taiwan staged its own summit immediately before the forum.

She did not explain why the Solomons leader had been invited at this particular time but said it was his decision to accept or not.

"We are concerned that China is trying to sabotage Taiwan's diplomatic ties, our friends. So we are afraid that it was China that tried to destabilise the region," Ms Chang said.

Nauru President Ludwig Scotty said Taiwan chartered an aircraft for leaders from the

Taiwan summit in the Marshall Islands to Tonga for the forum.

If he himself had been invited, he would have politely declined and said another time.

"We are leaders of our countries. Nobody can tell us what to do.

"Sogavare is not a child that anybody can pull by the ear. He is the leader of a democratic country and he is free to do whatever he wishes."

Ms Chang said allegations of "chequebook diplomacy" against Taiwan were "very unfair."

"Taiwan would never do chequebook diplomacy.

"I think it is China, not Taiwan, that is doing the chequebook diplomacy."

All donations were subject to the approval and scrutiny of Taiwan's legislature.

She said Taiwan was concerned about the influence that China continued to play in the Pacific region, "especially considering the fact it is a communist country, no democracy, no respect of human rights."

"We are afraid that their influence will affect the stability of the region."