By Eoin Blackwell
AAP Papua New Guinea Correspondent
Responding to a question during a press conference in Port Moresby on whether his department had been instructed to prevent Prof Garnaut entering PNG, Mr Pato responded "I believe yes".
He answered "yes" when the question was put to him a second time.
The orders had been made "on the basis of the prime minister's statement to the parliament that (Prof Garnaut) had said certain things or done certain things that are not conducive or friendly to the people of PNG," Mr Pato said on Wednesday.
"There is no deportation of Prof Garnaut, but our position is he is not welcome in PNG at this time anyway."
During a grievance debate in parliament on Friday, Mr O'Neill referred to a report in The Australian newspaper quoting Prof Garnaut as saying that with such an accumulation of wealth in PNG, it was "tempting for political figures to think of better ways of using it right now rather than putting it into long-term development".
The comment drew the ire of Mr O'Neill.
"I will put (Prof Garnaut) on notice that he is no longer welcome to this country," Mr O'Neill said.
"I want it out on record in this parliament that we will not tolerate people of such standing coming in and disrespecting leaders of this country."
Prof Garnaut, who until recently was also chairman of the PNG Sustainable Development Fund (PNGDF) trust, would not be allowed back until control of the Ok Tedi mine was given back to the PNG people.
The trust was given ownership of the Ok Tedi mine, located in PNG's Western Province, by mining giant BHP.
Mr O'Neill said BHP was running the PNGSDF by remote control from Melbourne and questioned whether the 37-year-old nation had benefited from the project.
"What have they delivered? We have given them a blanket cover, blanket insurance, protection from this parliament that we will never sue them for the damage they have caused to our people.
"We have seen many big announcements about major projects that will change the course of this country over the past 10 years, and yet we have yet to see one of those projects being delivered."
PNG's former prime minister Sir Mekere Morauta has been named as chairman of the PNGSDF, replacing Prof Garnaut.