News that the Tuvaluan Government said it was grateful for aid from Australia and New Zealand but wanted to act in the best interests of its people has been met with disappointment.
The decision comes before a crucial International Whaling Commission meeting at which Japan may take control of the 66-nation body.
New Zealand's whaling commissioner, Sir Geoffrey Palmer, said Tuvalu's stance was bad news.
"It's going to be exceedingly close and therefore every vote counts."
A senior Tuvaluan Government official was quoted as saying: "Our position has never changed since we joined the International Whaling Commission. We are for the sustainable use of whatever resources we have, be it whales, fish, forestry, land.
"Whilst we appreciate assistance from both countries, Tuvalu should be allowed as a sovereign nation to make its independent decision on what is best for its people."
Mr Carter was not available for comment yesterday but a spokesman said despite relationship-building between the two countries "it was never expected the meeting would produce an overnight change in Tuvalu's position".
The diplomatic failure for Mr Carter comes as nations lined up with Japan meet in Tokyo today to plan their strategy for the IWC meeting from June 16 to 20 in the Caribbean nation of St Kitts and Nevis.
On paper Japan has a majority of the 66 member nations in the IWC. To overturn the 1986 moratorium on commercial whaling would require a three-quarters majority. This is considered unlikely, but a simple majority vote would amount to a big win for Japan and fellow whaling nations Norway and Iceland.
Mr Carter is to visit the Solomons, Kiribati and Nauru before the IWC meeting. Sir Geoffrey said the lobbying was important "as the Pacific has been turning against us in the International Whaling Commission".
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