Fiji's military government on Wednesday said it would take control of national carrier Air Pacific from Australia's Qantas Airways using a decree that states substantial ownership and effective control of all Fijian airlines should be local.

While Qantas is a significant minority shareholder in Air Pacific, it exercises control through supermajority and veto rights, the government said in a statement.

With this law, the government has now corrected the activities of prior Fijian governments, which allowed foreign citizens to control Fiji's national airlines, the statement said.

A Qantas spokeswoman in Sydney denied the airline had veto power over Air Pacific's operational decisions nor did it have effective control.

Qantas will assess the implications of the decision to change the airline ownership laws in Fiji and determine what impact this has on our minority shareholding in the airline, the spokeswoman said.

Air Pacific handles about 70 percent of the visitor traffic to Fiji, the government said. The airline faces rising competition from Qantas and its budget unit JetStar, which also flies to Fiji.

(Reporting by Narayanan Somasundaram; Editing by Matt Driskill)