By Terry Friel

CANBERRA, Sept 24 (Reuter) - Australian Prime Minister John Howard, defying Chinese threats of trade retaliation, has agreed to meet exiled Tibetan spiritual leader the Dalai Lama later this week in Sydney, Howard's office said on Tuesday.

"He is meeting him as a religious leader," a spokesman for Howard said, stressing that the talks on Thursday were not official.

In Beijing on Tuesday, China repeated a warning that the meeting would affect bilateral ties and accused Australia of interfering in China's internal affairs by hosting the Dalai Lama.

"The Australian government receiving the Dalai Lama is interference in China's internal affairs," Foreign Ministry Shen Guofang told a news briefing inBeijing.

Shen said the meeting would not only affect Sino-Australian diplomatic relations but would inevitably affect trade between the two countries.

Beijing routinely opposes all attempts to muster international support by the Tibetan god-king, whom it condemns as a pro-independence crusader out to split China.

China is Australia's sixth-largest trading partner, with two-way trade worth A$6.6 billion (US$5.2 billion) in the year to June 30, 1995.

Beijing previously has expressed concern about any meeting between the 1989 Nobel Peace laureate and Howard.

"About the leaders of some countries meeting the Dalai Lama, this is an interference in China's internal affairs," Shen said last week.

A spokesman for the Dalai Lama welcomed the confirmation of the meeting and said it was a positive move for the international campaign for autonomy for Tibet.

"It's encouraging," spokesman Paul Bourke told Reuters. The Australia Tibet Council also welcomed the meeting. "This meeting is of considerable symbolic significance to many Australians," spokeswoman Alex Butler said in a statement.

The Dalai Lama, who fled his Himalayan homeland after an uprising against Chinese rule in 1959, is seeking international pressure to force Beijing to open negotiations on autonomy for the vast but sparsely populated region.

China has been accused of widespread human rights abuses since troops invaded Tibet in 1950. Beijing denies the charges.

The Dalia Lama has urged Howard to lobby the Chinese government in supoport of his campaign. Australia officially regards Tibet as part of China.

The diplomatic chill over the meeting is the latest in a series of ructions between Canberra and Beijing.

Relations between the two countries have soured recently over a range of diplomatic and security issues, including a push to sell Australian uranium to Taiwan.

Beijing has also protested against the axing of an Australian soft loan aid scheme, a senior Australian minister's visit to Taipei and a new security pact between Canberra and Washington.

Howard's office said the media would be allowed to briefly photograph and film the two leaders, after earlier concerns cameras would be banned.

The Dalai Lama is due to leave Australia next Monday after a two-week visit that also included an unofficial meeting with Foreign Minister Alexander Downer.