Labor has called on the government to “consider very carefully” a request from Papua New Guinea for a $1.5bn loan, suggesting Australia must do more for the Pacific for its own sake rather than to block China’s growing influence.

Acting opposition leader Richard Marles made the call on Tuesday after the Australian Financial Review revealed the loan request.

The PNG commerce minister, Wera Mori, reportedly said PNG would like the loan to be provided “by Australia alone”, but questioned “where else can we go” if Australia refused – widely interpreted as a suggestion it would be forced to turn to China instead.

Australia’s planned “step up” of engagement with the Pacific has suffered in recent days after it watered down a communique from the Pacific Islands Forum despite overwhelming support from regional leaders for stronger action on the climate crisis.

Labor has taken aim at the Coalition for its record presiding over increasing emissions and unfortunate gaffes such as deputy prime minister Michael McCormack’s suggestion that Pacific islands will survive climate crisis – in part – because they “pick our fruit”.

Marles told Radio National the $1.5bn loan request was “a very big request” that highlights “how important it is” to get the relationship with the Pacific and PNG right.

“It’s not something that Australia has done for some time, so it’s a request the government would have to consider very carefully,” he said.

Australia provides annual aid to Papua New Guinea of $608m through direct funding of aid programs.

In 2017 the Turnbull government rejected a request from PNG to provide the aid in the form of direct support to its budget, with former international development minister Concetta Fierravanti-Wells warning that aid is not “charity”.

Marles said Australia should not be “fundamentalist” about the form aid takes but rather be “capable of delivering it in different ways”, while taking each request on its merits.

“The size of development assistance matters, but it doesn’t define the relationship,” Marles said. “We need to be deeply focused on building our relationship with the Pacific on its own terms.”

Marles said that Australia should not engage with the Pacific “by reference to China”, suggesting that “sometimes that’s the way Australia has gone about things”.

The shadow minister for defence rejected the view that PNG’s terms for the loan amounted to a demand for the money or else it would turn to China, but said he was not surprised “you get comments of that kind coming back from the Pacific”, given Australia has framed its Pacific policy with reference to China.

Marles said that a Pacific policy determined by a “strategic denial of China” would not work because “it will be viewed really cynically”.

“We can’t be there because we don’t want somebody else to be there, we should be there because it’s a part of the world that’s very central to us.”

Marles said that McCormack’s comments were “deeply offensive” and ignored the “existential threat” posed by the climate crisis to Pacific nations. The comments have led Tuvalu to threaten to withdraw from the seasonal worker program.

Marles called for an apology, and said the Coalition’s handling of the Pacific “step up” is more like a “stuff up”.