Papua New Guinea is heading towards economic and social collapse and could be overrun by criminals, a new Australian report has warned.
Australia has already begun sending police to PNG
The Australian Strategic Policy Institute called for a radical increase in aid for PNG and said Canberra should take over some aspects of government.
PNG's Foreign Minister Sir Rabbie Namaliu told local media the report was "sensationalist" and inaccurate.
His Australian counterpart arrived in PNG on Tuesday for bilateral meetings.
The ASPI study found that PNG's weak government and policing had allowed international crime gangs to relocate from South East Asia in recent years.
The report, by a think tank funded by the Australian government, warned that if PNG's weaknesses were allowed to continue, the country could fall "off a cliff into full-scale state failure" within the next 15 years.
The central government's authority could collapse and criminals would dominate the economy, it said, resulting in "half a dozen lawless and unviable mini states".
But Sir Namaliu told PNG's Post-Courier newspaper that, while the country's law and order problems were well known, their extent as claimed by the report was not backed up by evidence.
"I find it worrying that organisations supposedly promoting constructive and informed debate make such statements that grab the headlines and contribute nothing constructive or helpful to the Papua New Guinea-Australia relationship," he said.
"There is not even the slightest amount of evidence available to support the ASPI's claim that the economy could collapse and politics and the economy could be dominated by criminals."
He added that PNG's press freedoms, judiciary and democratic functions were all strong, and that the economy was improving.
The report's authors urged Australia to more than double its aid budget to the ailing nation, and take control of PNG's immigration and customs services.
The BBC's correspondent in Sydney, Phil Mercer, says the country has rich supplies of minerals and timber, but the economic outlook is extremely bleak for its population of five-and-a-half-million people.
The rapid spread of HIV and Aids is putting further pressure on the authorities.
Australia has already begun sending a total of 210 police officers and more than 60 bureaucrats to its troubled neighbour, as part of a multi-million dollar rescue package.
Security is expected to be discussed at meetings between Australian Foreign Minister Alexander Downer and his PNG counterparts which start in Lae, Morobe Province, on Wednesday.
Mr Downer is on his annual tour of the South Pacific, which will also include stop-overs in the Solomon Islands, New Caledonia and New Zealand.