Sudan, Egypt and Ethiopia agreed on Sunday to hold further talks this month to resolve their long-running dispute over the latter’s huge dam on the Blue Nile, Sudan’s water ministry said.

Previous three-way talks have failed to produce an agreement on the filling and operation of the vast reservoir behind the 145-metre tall Grand Ethiopian Renaissance Dam (GERD), a hydropower project which broke ground in 2011.

On Sunday, the three countries held a new round of talks by video conference in the virtual presence of South African officials, as well as other international observers. South Africa currently holds the African Union’s rotating chair.

"The meeting concluded ... that this week will be devoted to bilateral talks between the three countries, the experts, and the observers,” Sudan’s water ministry said in a statement.

This week’s talks will pave the way "for the resumption of tripartite negotiations on Sunday January 10 in the hope of concluding by the end of January”, it noted.

Egypt, which depends on the Nile for about 97 per cent of its irrigation and drinking water, fears Ethiopia’s dam would severely cut its water share.

Sudan hopes the dam will help ameliorate flooding, but has also warned that millions of lives would be at "great risk” if no binding agreement was reached.

Ethiopia says the hydroelectric power produced at the dam is vital to meet the power needs of its population.

It insists downstream countries’ water supplies will not be affected.

The Nile, the world’s longest river, is a lifeline supplying both water and electricity to the 10 countries it traverses.

Its main tributaries, the White and Blue Niles, converge in the Sudanese capital Khartoum before flowing north through Egypt to drain into the Mediterranean Sea.