SYDNEY (Sept 4): Papua New Guinea Prime Minister Peter O'Neill has ordered an investigation into alleged links between international terrorism and businesses operating in the country.

The Pacific nation's leader acted after a report in the Papua New Guinea Post-Courier, citing "top-secret documents", that companies established by Middle Eastern families with terror links had poured millions of dollars into PNG.

The businesses included logging, security services and agriculture, with the activities "protected by officials high in the PNG bureaucracy", according to the report.

The newspaper did not provide specific details, but said one family was based in neighbouring Australia.

O'Neill told parliament on Wednesday that he viewed the allegations as "very serious".

"The national intelligence agencies are investigating the activities of individuals and companies with alleged links to international terrorist organisations," he said, according to reports.

"The allegations are of a financial nature and there is no evidence to suggest that there are risks to the safety of people in Papua New Guinea."

He added that if any links were proved, the companies could be deregistered and their assets stripped.

"This is an important and a serious matter where people who are linked to do terrorist activities outside of PNG seem to be taking shelter in the country under disguise of getting into business," he said.

The Australian government said it was "not aware of any Australians in PNG who are suspected of involvement in terrorism".