"We didn't feel we were getting good value for money from that position," MacKay told reporters Wednesday.

Anawak's duties would be assumed by senior officials at Canada's foreign affairs department, officials said.

But critics said the move undermines Canada's dealings with its Arctic neighbors on common issues, including land claims and measures to fight global warming.

"It is a major concern ... because Canada seems to be taking a step back at a crucial time when other countries are focusing their attention on the Arctic for its resources or for access to other parts of the globe," Duane Smith, president of the Canadian Inuit Circumpolar Conference, told AFP.

"Canada has been a strong advocate on circumpolar issues and the lead in a number of working groups. It's going to be a big question about where Canada is going in regards to many of these issues at a meeting next month in Russia," he said.

"The ripple will be felt throughout the Arctic if Canada abandons this leadership role."

The move could weaken Canada's fight over several territories claimed by other countries in the Arctic, critics said.

Canada is currently at odds with Denmark over the tiny, uninhabitable Hans Island between Ellesmere Island and Greenland, and is feuding with Russia over rights to overlapping parts of the Arctic continental shelf.

As well, Ottawa and Washington disagree over control of the famed Northwest Passage and the resource-rich Beaufort Sea, which touches both Alaska and Canada's northern territories.

The disputes have grown in importance as scientists believe that global warming could open up the Northwest Passage to year-round cargo shipping by 2050, and allow the exploitation of resources like oil and natural gas in the Arctic.

Andre Lemay, a spokesman for MacKay, told AFP: "Circumpolar and environmental issues remain important components of the government's agenda (despite Anawak's dismissal). Several departments and agencies have programs focusing on these areas."

The Arctic Council is an intergovernmental forum set up to address Inuit or Arctic people's concerns and challenges. Canada, Denmark, Finland, Iceland, Norway, Sweden, the United States and Russia are members.

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