· In short: Tuvalu's incoming prime minister has indicated he will revisit the details of a landmark pact with Australia that he helped develop. 

· The Falepili Union would allow for increased migration to Australia, while surrendering veto power over Tuvalu's security arrangements to Canberra. 

· What's next? Tuvalu broadly supports the deal but wants to make changes it says will make the arrangement more "workable" and will safeguard the "integrity of the sovereignty" of the country.

Tuvalu's new government has dealt a blow to Australia's signature foreign policy initiative in the Pacific, signalling it will seek revisions to the landmark Falepili Union in order to protect its sovereignty.

Australian officials were relieved when former regional diplomat Feleti Teo — who was on a panel that helped craft the agreement — won the contest to become prime minister earlier this week.

But, in a sign of the political sensitivities which still surround the pact, Mr Teo's new government has today acknowledged that Tuvalu's citizens were not sufficiently consulted on the agreement.

A document outlining the new government's key priorities makes it clear that Tuvalu — while broadly supporting the pact — will seek changes to make it "workable".

"The new government intends to address those process issues and to work with the government of Australia towards a workable arrangement in advancing the objectives of the special union between Tuvalu and Australia, in particular safeguarding the integrity of the sovereignty of Tuvalu," the document reads.

It was criticised by some Tuvaluan citizens and MPs, who said it granted Australia powers that were too far-reaching.

Both countries are yet to pass legislation through their respective parliaments to give force to the treaty.

Australia's Pacific Minister Pat Conroy said he believed the statement from the new government of Tuvalu gave strong backing to the Falepili Union, but left the door open for further negotiations.

"We have been very clear in both our public and private utterances that of course we respect the of the government of Tuvalu and we'll work with them if they want to work on particular variations of what has been agreed to," he told Radio National.

A spokesperson for the Department of Foreign Affairs and Trade told the ABC that Australia was ready to engage with the new prime minister and his government on their priorities, including the Falepili Union.

"Australia welcomes Tuvalu reiterating its support for the broad principles and objectives of the Australia-Tuvalu Falepili Union," they said.

New PM to focus on climate issues

Tuvalu's new prime minister and cabinet ministers were sworn into their portfolios in the capital Funafuti this morning.

A congratulatory message from Australian Prime Minister Anthony Albanese was read out during the ceremony, signalling the country's commitment to Tuvalu.

WATCH

Duration: 7 minutes 14 seconds7m

"This is a significant time in the relationship between Australia and Tuvalu," Mr Albanese's statement reads.

"As sovereign nations, it is more important than ever that we work together in the Pacific way to shape the kind of region and world we seek."

Tuvalu has also reaffirmed its commitment to maintaining the "long-term and lasting special relationship" with Taiwan, following calls by some MPs for the allegiance to be reviewed.

Outlining his government's key priorities, Mr Teo said climate change was his country's greatest challenge.

"Climate change and the impact of sea-level rise will remain the single greatest and existential threat to the security, livelihood and wellbeing of the people of Tuvalu," he said.