PNG PM O'Neill's arrest warrant stayed

Papua New Guinea Prime Minister Peter O'Neill has avoided arrest by the country's anti-corruption watchdog.

PNG PM Peter O'Neill (AAP)

Fraud investigators want to quiz Mr O'Neill over allegations he authorised an illegal payment of about $31 million to Paul Paraka lawyers.

But a statement from Mr O'Neill's office says the warrant has been stayed by the National Court.

Mr O'Neill has repeatedly denied the allegations against him in what is one of PNG's longest-running fraud investigations.

Yesterday Mr O'Neill told SBS the allegations were 'politically motivated.'

"It is basically motivated by politics. There is a lot of political movement in the country," Mr O'Neill told SBS.

"(The opposition) are using any avenue possible to try and discredit government and find a way to get me arrested."

SBS has obtained a copy of Mr O'Neill's lawyers response to the arrest warrant.