By Phil Mercer In Sydney

Papua New Guinea is on the verge of an Aids epidemic that could wipe out 40% of the adult population within 20 years, according to an Australian report.

The report by the Australian Government's aid agency AusAid says as many as 15,000 people out of the 4.6m population are HIV positive.

Aids-related diseases are the major cause of death at the general hospital in the capital Port Moresby and the number of infections is rising by up to 30% every year, says the report.

The consequences for the most heavily populated Pacific nation could be crippling, the report warns.

Without sufficiently qualified workers the government might not be able to function - not to mention the huge pressure the looming epidemic could have on health services.

Unprotected sex

The government in Port Moresby now has a National Plan for HIV Prevention. It aims to provide education, counselling and improved medical care as well as a more efficient way of tracking the spread of the virus.

The country has the highest rates of sexually transmitted diseases in the region.

Australia, Papua New Guinea's former colonial master, is spending $30m (Aus $55m) as part of a five year HIV and Aids programme. It is to build and equip clinics to treat sexually transmitted infections across the country.

HIV in Papua New Guinea is largely a heterosexual problem. There is a high incidence of unprotected sex and one in every six prostitutes is HIV positive.

Some commentators have blamed the spread of infection on the breakdown of traditional village life.