(Reuters) - Northern and southern Sudanese leaders said on Saturday they would consider forming a confederation or a common market if southerners chose to declare independence in a forthcoming referendum.
Citizens of the oil-producing south are six months away from a vote on whether to remain part of Sudan or split and become an independent state -- a plebiscite promised in a 2005 accord that ended decades of north-south civil war.
Leaders from the dominant northern and southern parties began formal negotiations on Saturday on issues including how they would divide oil revenues after the referendum.
In the most detailed public statement to date on what Sudan might look like after the vote, they told reporters they were considering four options suggested by an African Union panel led by former South African president Thabo Mbeki.
In one option "we considered the possibility of the creation of two independent countries which negotiate a framework of cooperation which extends to the establishment of shared governance institutions in a confederal arrangement," said Mbeki, who spoke at the launch of negotiations in Khartoum.
Another option was for two separate countries with shared "soft borders that permit freedom of movement for both people and goods," said Mbeki.
The other two options, he said, were total separation -- with citizens needing visas to cross the border -- and continued north-south unity, if southerners chose that option in the referendum.
"These (the four options) will be part of the issues to be discussed by both parties," Sayed el-Khatib, a senior member of north Sudan's National Congress Party (NCP), told reporters.
Pagan Amum, secretary general of the south's dominant Sudan People's Liberation Movement (SPLM), said the referendum would allow the south to "reset" its troubled relationship with the north, whether southerners chose unity or separation.
"If the choice is separation, then we will be ensuring that there will be good cooperation between the two independent states. It could take the form of a confederation. It could take the form of a common market," he said.
The parties said they would spend the next months working out how they would share oil and other assets, as well as the burden of Sudan's debt, after the vote.
Also on the agenda was the citizenship of their populations -- campaign group Refugees International said last month that southerners in the north and northerners in the south might be left stateless and vulnerable to attacks after a split.
Amum said the parties also had to resolve other issues before the vote including the position of their north-south border and the membership of a commission to organise a referendum on the status of the sensitive Abyei border area.
Many commentators say southerners, embittered by decades of civil war, are likely to vote for separation in the referendum, due in January 2011.
Sudanese President Omar Hassan al-Bashir, the head of the NCP, has promised to campaign for unity. Most of Sudan's proven oil reserves are in the south.
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