Dozens Reported Wounded As PNG Police Fire On Protesters, Riots Spread

SYDNEY, June 8 (Reuters) - Dozens of people were wounded in Papua New Guinea on Wednesday after police opened fire on a student demonstration in the capital and riots erupted across the country, but officials said earlier reports of up to four dead were incorrect.

A groundswell of political unrest has surged in the island nation, just to Australia's north, in recent weeks amid calls for Prime Minister Peter O'Neill to resign over corruption allegations.

Students and officials said police fired on the public and used tear gas to disperse crowds during a protest at the University of PNG's Waigani campus in Port Moresby. Protests were later reported in the PNG Highland cities of Goroka and Mt Hagen, and in Lae on the north coast.

"Now there is a very big clash with the public and with the police just outside the Port Moresby General Hospital," a hospital official told Reuters by telephone soon after a group of wounded students were taken there for treatment.

"There is also shooting going on, open gunfire."

The government said Initial reports that up to four people had been killed were incorrect. An official at the Port Moresby General Hospital said 38 casualties had been treated there, including four with bullet wounds, but no deaths.

O'Neill later issued a statement in which he refused to stand down.

"The facts relayed to me are that a small group of students were violent, threw rocks at police and provoked a response that came in the form of tear gas and warning shots," he said.

Papua New Guinea, formerly administered by Australia, struggles with endemic violence and poverty despite a wealth of mineral resources. It is ranked 139 out of 168 in Transparency International's corruption index.

Wednesday's events echoed a similar confrontation when police opened fire on anti-government student protesters in 2001. A full account of that incident has never been given.

The PNG Police Ministry did not directly address the shooting but said in a statement students or others who had engaged in subsequent vandalism or assaults would face the "full force of the law".

"Police are now investigating the string of offences that have been committed and arrests will be made," it said.

The Australian government said there had been an "unconfirmed number of deaths and serious injuries", while the United States and Britain told its citizens to avoid areas hit by violence. "The situation is still volatile and could escalate at any time," the U.S. embassy said in a statement.

Qantas Airways and Virgin Australia said they had cancelled one flight each from Australia to Port Moresby and were assessing whether to fly on Thursday.