Wellington, Dec 23 NZPA - Fiji's interim government has again criticised New Zealand but it is still not clear whether it intends expelling acting high commissioner Caroline McDonald.

Attorney-General Aiyaz Sayed-Khaiyum was reported last night to have accused New Zealand and Australian high commission staff of spying on Fiji and using bullying tactics.

TV One News reported the attorney-general as saying Ms McDonald would not be expelled "at this stage" but a later Radio New Zealand report said he made no mention of any action against her.

The diplomatic row is over a demand by self-appointed prime minister Voreqe (Frank) Bainimarama that a visa be granted to the son of a senior official in Suva.

He told the Government last week Ms McDonald would be expelled if the visa was not granted to George Nacewa so he could resume studies at Massey University.

He was told last Tuesday the visa would not be granted, and since then the Government has been waiting for his reaction.

Foreign Minister Murray McCully has spoken to Cdre Bainimarama by phone in an attempt to defuse the situation, and earlier today Prime Minister John Key warned of retaliatory action of Ms McDonald was expelled.

TV One's report said Fiji's attorney-general had talked about a team being set up "to try and work with New Zealand to foster better relations".

Cdre Bainimarama has become increasingly irritated by the travel sanctions New Zealand imposed on Fiji after he led a coup two years ago that overthrew the elected government.

The travel ban applies to members of his government, the military, and their relatives.

George Nacewa is the son of Rupeni Nacewa, a secretary in the Fiji president's office.

The last contact between the two governments was late last week when Cdre Bainimarama sent an angry letter to Mr McCully.

The foreign minister responded by reiterating New Zealand's position.

Mr Key this morning said the ball was in Cdre Bainimarama's court and he hinted an expulsion could trigger tit-for-tat retaliation.

NZPA understands the Government would consider expelling Fiji's high commissioner in Wellington, Ponsami Chetty, if Ms McDonald was given her marching orders.

New Zealand's previous high commissioner in Suva, Mike Green, was expelled in June 2007 after being accused of interfering in Fiji's domestic affairs.

A spokesman for Mr McCully would not comment last night on the reports from Suva.

It appeared the Government had not received any formal complaint about the allegations of spying and bullying.

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