ISLAMABAD: Pakistan has shelved plans to privatise its power firms and will miss deadlines to sell other loss-making state firms, reneging on promises it made to the International Monetary Fund (IMF) in return for a $6.7 billion bailout three years ago.

Two government officials with direct knowledge of the situation said IMF officials who met Pakistani officials in Dubai this week to review progress on reforms were angered by the backtracking.

But the IMF still agreed on Thursday to release the next $497 million tranche of that loan, leaving a further $1.1 billion left to be released.

Announcing that its team in Dubai had agreed that the tranche should be disbursed, subject to approval by the Fund's executive board, the IMF went on to lament Pakistan's slow progress in some areas.

"While many structural benchmarks have been met, measures pertaining to the energy sector reform and restructuring of loss-making public enterprises are yet to be implemented," the IMF said in a statement.

For all the IMF's frustration over the privatisation delays, the government has pushed ahead on other reforms, Pakistani officials said.

"The energy sector reforms are on track and we have been working consistently," Pakistani Finance Minister Ishaq Dar told a joint news conference with IMF mission chief Harald Finger when asked about the decision to shelve the privatisation of power firms.

Economists say Pakistan can expect the money to keep coming with little more than a reprimand as Western allies, and neighbours Afghanistan and India, fear an economic meltdown would further destabilise the nuclear-armed Muslim nation of 190 million, whose fragile democracy has been crippled by years of power shortages, corruption and militant violence.

Still, a rebuke would send a negative signal to international financial markets about Prime Minister Nawaz Sharif's government.

"It was embarrassing and brutal," a senior Pakistani official present at the meeting in Dubai, told Reuters, describing the IMF's response when Finger was told that the government had decided not to sell nine power distribution companies because of fear of labour unrest.

"It was nothing less than a dressing down. If the IMF still doesn't penalise us, then all I can say is, 'We're very lucky'," the official said.

The other source, a senior finance ministry official who was also in Dubai, confirmed the account. The ministry did not respond to calls seeking comment.

A spokesman for the IMF said earlier the Fund would not comment during a mission review. During the news conference, Finger did not address alleged tensions at the Dubai meeting, though he did acknowledge "complexities" in the process.

The IMF loan helped Pakistan stave off a default in 2013, when dwindling foreign exchange reserves covered less than six weeks of imports. Reserves have since swelled to $20.5 billion in January from $11 billion in mid-2013.