Otti also called on the United Nations to assume a greater role in the mission, saying the Solomon Islands' experience with Australian-designed "cooperative intervention" proved that the world body must retain a leading role in international peacekeeping.
The 2,200-strong Australian-led international security contingent known as the Regional Assistance Mission to the Solomon Islands (RAMSI) has been in the country in 2003, when it arrived to help quell communal strife in which hundreds died.
But relations between Australia and the Solomons plunged since Prime Minister Manasseh Sogavare took office in May 2006 following parliamentary elections.
Sogavare has criticized the mission over the past year, threatening to expel Australian personnel from the mission and to strip the troops of their immunity from prosecution. He accused the mission of representing too much of Canberra's interests and of failing to focus on its mandate to restore law and order in the South Pacific nation.
Sogavare has called for a RAMSI "exit strategy."
Canberra responded by accusing the Solomons' leader of poor governance. Australian peacekeepers also raided Sogvare's office, saying they were searching for evidence in a child sex criminal case.
Otti said it was the Solomons' "sovereign right to determine the terms on which the government of the Solomon Islands will permit our continued occupation by the visiting contingent."
"My (government) remains unmoved by Australian resistance to our attempts to reclaim our sovereignty and independence," he said.
Otti noted that after the government had criticized Australia's military role in the Solomons, he too had been denied a visa to visit Canberra.
"One would have to admit that this is an incredible justification for excluding democratically elected leaders of neighboring countries unknown for breeding terrorists," he said.