Environment Minister Melissa Price has had accusations levied against her alleging that she insulted a Pacific Island leader during a Canberra dinner.

On Tuesday evening during the dinner gathering, the former president of Kiribati and environmental advocate Anote Tong was, according to several sources gathered by the ABC, approached by Ms Price.

During the interaction, sources allege that Ms Price told Mr Tong “I know why you’re here. It is for the cash.”

She then allegedly followed up by saying that it was “always about the cash” with regards to Australia’s interactions with the Pacific Islands and satirically offered to write Mr Tong a cheque then and there.

The alleged incident was conveyed to both the Prime Minister and Ms Price in a letter by Labor MP Pat Dodson in which he demanded an apology be made to Mr Tong.

Ms Price told Parliament yesterday that she “100 per cent” disagreed with the contents of the letter and the narrative of events that allegedly took place.

Phil Glendenning, Director of the Edmund Rice Centre and attendee at the dinner in question, confirmed that the comments had been made.

In a statement, Ms Price said that she had a “cordial and relaxed” conversation with Mr Tong where she reaffirmed Australia’s commitment to helping Pacific Island nations affected by climate change.

In a Sky News interview, Mr Tong was asked about the alleged encounter and said that “it’s hardly relevant to the mission I’m trying to embark on”.

Greens Senator Sarah Hanson-Young has said this incident combined with the rejection of an IPCC report into the need to divest from coal showed that Ms Price is “the worst environment minister ever”.