YANGON (Reuters) - Myanmar insisted on Wednesday it was ready to set up a repatriation process for Rohingya Muslims even as more risked their lives fleeing the country, but it voiced fears Bangladesh was delaying an accord to first get international aid money.

Rohingya refugees stand outside shelters in Palong Khali refugee camp near Cox's Bazar, Bangladesh, November 1, 2017. REUTERS/Hannah McKay

A senior Bangladesh home ministry official described the accusation as outrageous.

More than 600,000 Rohingya have fled predominantly Buddhist Myanmar to neighboring Bangladesh since late August to escape violence that accompanied a brutal military counter-insurgency operation after Rohingya militant attacks on security posts in Myanmar’s Rakhine State.

Stung by international criticism and accusations of ethnic cleansing, Myanmar’s de facto leader, Aung San Suu Kyi, has said Rohingya refugees who can prove they were resident will be accepted back.

But for now, the flow of people is one-way, with Rohingya still preferring to risk being destitute in Bangladesh rather than stay in Myanmar in fear of their lives.

Zaw Htay, a spokesman for Suu Kyi, said Myanmar was ready to begin the repatriation process any time, based along the lines of an agreement with Bangladesh that covered returns of Rohingya to Myanmar in the early 1990s.

He said Bangladesh had yet to accept those terms.

“We are ready to start, but the other side did not accept yet, and the process was delayed. This is the number one fact,” Zaw Htay, Director-General of the Ministry of the State Counsellor’s Office, told journalists on Tuesday.

A memorandum of understanding on border liaison posts was signed with Bangladesh Home Minister Asaduzzaman Khan following talks in the Myanmar capital, Naypyitaw, last week, but there was no progress on reviving the old agreement.

Zaw Htay linked the delay by Bangladesh to the money raised so far by the international community to help build gigantic refugee camps for the Rohingya.

“Currently they have got $400 million. Over their receipt of this amount, we are now afraid of delaying the program of deporting the refugees,” he said in comments carried in a front-page article in the state-run Global New Light of Myanmar newspaper on Wednesday.

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“They have got international subsidies. We are now afraid they would have another consideration as to repatriation,” he said.

A senior Bangladesh home ministry official gave a scathing response.

“Their claim is outrageous. We are stunned,” the official told Reuters in Dhaka. “How can they say this when everyone knows who are making the delay?”

The Bangladesh government issued a statement last Thursday saying that Myanmar had not agreed to 10 points put forward by its minister at last week’s talks, including the full implementation of the recommendations of an Advisory Commission on Rakhine State, chaired by former U.N. Secretary General Kofi Annan, for a sustainable return of Rohingya.

Khan told Bangladesh media last Friday that the two sides were unable to form a joint working group but said it should be set up by the time Foreign Minister Abul Hassan Mahmood Ali goes to Myanmar for further talks on Nov. 30.

HAUNTED BY DEATH, INSECURITY

The United Nation’s new interim resident coordinator for Myanmar began his new job on Wednesday. Knut Ostby, a Norwegian, has stepped into the key humanitarian and diplomatic role at a time of growing strains with the Myanmar government over the handling of the Rohingya crisis.

Meantime, while Myanmar and Bangladesh work out how Rohingya can eventually go home, the grim exodus from Myanmar continues.

Seven Rohingya, including three babies and two children, drowned making the perilous sea crossing up the coast from Myanmar to Bangladesh earlier this week.

Given the horrors endured by many Rohingya now living in refugee camps it would be unsurprising if they were in no hurry to return to their old home.

U.N. investigators interviewing Rohingya living in refugee camps in Bangladesh said on Friday they had gathered testimony pointing to a “consistent, methodical pattern” of killings, torture, rape and arson.

A worry for Myanmar as it prepares to scrutinize any returnees is the risk of Islamist militants sneaking into the country, as several groups, including al Qaeda in the Indian Subcontinent (AQIS), have called for a jihad to fight for the Rohingya.

(This version of the story fixes typo in second paragraph)