Papua New Guinea prime minister Sir Michael Somare claims the World Bank is threatening to pull out of the country because of a timber industry dispute.

The World Bank has denied the claim but it is concerned about the government’s record on forestry conservation. Media reports have speculated that a conservation programme, sponsored by the bank, may be suspended and a $US17m loan withdrawn because of timber concessions granted to logging companies.

Mr Somare said the goverment is selective when granting concessions.