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By Charlotte Greenfield and Tom Westbrook

WELLINGTON/SYDNEY (Reuters) - Police in the South Pacific island of Nauru briefly held a New Zealand journalist at a police station and cancelled her permit to cover a regional leaders' conference on Tuesday, because she met refugees without seeking permission, the government and broadcaster TVNZ said.

Nauru closely controls access for foreign journalists and is particularly sensitive regarding asylum seekers sent there by Australia. It has already banned Australia's public broadcaster from sending reporters to the island after critical coverage.

Under Australia's hard line immigration policy anyone attempting to reach Australia by sea is sent for processing to camps on Nauru and Papua New Guinea's Manus Island and is never allowed to settle in Australia.

Television New Zealand (TVNZ) Pacific correspondent Barbara Dreaver said she was held by police for three hours after speaking to a refugee outside a restaurant.

"The police showed up and said I was breaching my visa conditions and I was taken to the police station," Dreaver said in a TVNZ interview.

"I think it probably shows that things are a wee bit sensitive here, in fact a lot sensitive," she said.

Nauru's government said she "voluntarily accompanied" police to the station and was in breach of her visa conditions because she did not go through the "proper channels" to seek to report a story outside the meeting.

"This journalist did not follow procedures ... police and security agencies are genuinely concerned about safety and security risks should media take it upon themselves to enter refugee residential settlements where emotions are high," the government statement said.

Australia defends its policy of forcing asylum seekers who arrive by sea to Manus Island and Nauru, saying it has deterred people from making dangerous journeys after thousands had drowned during ill-fated voyages in small boats.

Australia has negotiated for the United States to resettle some 1,250 refugees, including from Nauru. But resettlements have been slow, the vetting process sensitive and Nauru's hosting of the Pacific Islands Forum this week has thrown fresh scrutiny on to the situation.

Nauru suspended its typical A$8,000 fee ($5,777) for journalist visa applications during the Pacific Islands Forum meeting, but warned journalists against engaging "in activities that cause or encourage disruption or civil unrest".

The forum, attended by 18 member governments, comprising Pacific states plus Australia and New Zealand, runs until September 6.

($1 = 1.3847 Australian dollars)

(Reporting by Charlotte Greenfield and Tom Westbrook; Editing by Simon Cameron-Moore)

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Reuters