SYDNEY Vanuatu's parliament will elect a new prime minister after the Pacific Island nation's court on Monday dismissed an appeal against a decision that would remove Ishmael Kalsakau from the role.

Vanuatu, at the centre of a strategic rivalry between China and Western countries in the region, was plunged into political uncertainty when opposition leader Bob Loughman lodged a no-confidence petition criticising Kalsakau for actions including signing a security pact with Australia after his government won an election last year.

The Supreme Court found a vote of no-confidence in Kalsakau had been won by opposition parties, but the court had stayed action to remove Kalsakau until an appeal by the parliament's speaker was heard.

The appeal was dismissed on Monday, a government spokesman said in a statement on social media. Parliament will resume to elect a new prime minister.

Loughman, who drew Vanuatu closer to China as the previous prime minister, has said the security pact with Australia compromised Vanuatu's "neutral" status and could jeopardise development assistance from China, its biggest external creditor.

The United States and its allies are seeking to dissuade Pacific Islands nations from establishing security ties with China, after it signed a security pact with the Solomon Islands.

China has sent police experts to Vanuatu amid the political crisis, and the Vanuatu police force said it would work with "all partners" - Australia, New Zealand and China.

(Reporting by Kirsty Needham; Editing by Michael Perry)