By Aaron Maasho

ADDIS ABABA (Reuters) - Border security talks between Sudan and South Sudan are deadlocked, the top southern negotiator said on Tuesday, raising the prospect of an impasse that could prolong a shutdown of oil exports and push both economies closer to collapse.

The former civil war foes came close to all-out war in April after troops clashed along their shared border in the worst violence since South Sudan declared independence from Sudan last year.

They agreed in September to end hostilities, pull back troops and restart the transportation of southern oil through Sudanese pipelines. But South Sudan negotiator Pagan Amum told Reuters talks on how to put those promises into practice had now stalled.

"The talks now are deadlocked and, essentially, I see these talks as having collapsed because Sudan has taken a new strategic position opposing the development of cooperation between the two states," he said in an interview.

"I am not seeing any point of continuing these talks. I think it is now time for the leadership of South Sudan to refocus their attention," Amum added.

A collapse in talks would be a further blow to the two countries' already-struggling economies - oil provided almost all of the South's state revenues and Sudan was counting on earning millions of dollars in pipeline fees.

Landlocked South Sudan inherited three-quarters of Sudan's oil production when it broke away under the terms of a 2005 peace deal that ended decades of north-south civil war. But the only pipelines that can currently take the southern crude to market run through Sudan.

The new nation shut down its 350,000 barrel-a-day output in January after tensions escalated over transit and other fees. Amum had suggested earlier this month they could still restart the oil flow by the end of the year.

Hopes that production would quickly resume after the September deals were dampened this month when Sudan said it would not allow South Sudanese oil exports to pass through its territory until Juba cut links with Sudanese insurgents and expelled their leaders.

TALKS COLLAPSE

Defence ministers and other senior officials from both sides arrived in Addis Ababa at the weekend to hammer out another deal, and their talks were expected to end on Tuesday.

Amum said Khartoum's position meant resuming oil exports through Sudan was unlikely now.

"The only way out of this is to abandon all ideas about oil flowing through Sudan and build refineries inside South Sudan and build alternative pipelines to the Indian Ocean," Pagan said.

The South had suggested building alternate pipeline in the past, but analysts have said such a scheme would take years to build and cost billions of dollars.

Sudan's Defence Minister Abdel Raheem Mohammed Hussein told Reuters the negotiations were ongoing, but declined to give further details.

The African Union last week urged Sudanese President Omar Hassan al-Bashir to meet his southern counterpart Salva Kiir "in the shortest possible time".

Any full breakdown of relations between the two countries would raise fears of a return to fighting.

An estimated two million people died in their last major conflict. Mostly Muslim Sudan fought rebels in the south, where most follow Christianity and traditional beliefs, for all but a few years from the 1950s in civil wars fueled by ethnicity, religion, oil and ideology.

(Writing by Aaron Maasho; Editing by Alexander Dziadosz and Andrew Heavens)