South Sudan's border region has been flooded with hundreds of thousands of refugees fleeing fighting in Sudan's South Kordofan and Blue Nile states.

South Sudan's Ministry of Health has reported almost 400 cases of the virus since the outbreak was identified in July.

"Cases are rising day by day, thus placing immense pressure on the available heath services and resources. This is of grave humanitarian concern," the ministry said in a joint statement with U.N. agencies.

In Maban county, the area affected, 108,000 Sudanese refugees live in camps in dire conditions, aid officials say. Hepatitis E causes liver infections and is spread by drinking water contaminated with faeces.

John Lagu, director of preparedness and response at the Ministry of Health, said the virus thrived in camps that are overcrowded and flooded.

"The good thing is that the virus is not very aggressive ... and that cases of mortality are low. Few people die from it," Lagu told Reuters by telephone.

However, he warned that there was a risk the virus could spread to local people, who have less access to healthcare than those in the camps.

"It's just another indication of the very bad conditions that are there," said Stefano Zannini at medical aid group Medecins Sans Frontieres.

"There is a lack of food, clean drinking water and the number of latrines is very low ... so you have all the right conditions for this type of outbreak to take place," he said.

South Sudan became independent in July 2011 from Sudan under a 2005 peace agreement that ended decades of civil war but the two nations are at loggerheads over demarcation of the border and other issues.

(Reporting by Hereward Holland; Editing by Ulf Laessing)

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