my $sftp = Net::SFTP::Foreign->new($host,
                                   user => $user,
                                   password => $password,
                                   more => [-o => 'PreferredAuthentica
+tions=publickey,password,keyboard-interactive']);
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Sadly that did not work. We can see the password being asked for and sent but the remote server is then denying access:

# looking for user/password prompt
# matching against (?i-xsm:(user|name|login)?[:?]\s*$)
# sending password
# checking timeout, max: 120, ellapsed: 0.291105031967163
# waiting for data from the pty to become available
# 2 bytes readed from pty:
debug3: packet_send2: adding 40 (len 82 padlen 6 extra_pad 64)
debug2: we sent a password packet, wait for reply
0d 0a                                                                 
+                          | ..
# looking for password ok
# password authentication done
Authenticated with partial success.
debug1: Authentications that can continue: password,publickey
debug2: we did not send a packet, disable method
debug1: No more authentication methods to try.
Permission denied (password,publickey).
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We will try and get the remote server ssh configuration from the customer in case they are using some strange settings so we can duplicate on our systems.

Thank you for you help and please do include this scenario as an option for the module as it appears to be a security policy in the financial sector.

Maybe you have to change the order of the PreferredAuthentications tokens to suit the server:

my $sftp = Net::SFTP::Foreign->new($host,
                                   user => $user,
                                   password => $password,
                                   more => [-o => 'PreferredAuthentica
+tions=password,keyboard-interactive,publickey']);
[download]

Could you include the full debugging output from the ssh binary when called from Net::SFTP::Foreign and also when you do it by hand to see what is being done differently?