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LONDON (Reuters) - Britain announced a 54 million pound aid package for Sudan on Wednesday and said the African country faced a "crucial and critical time" ahead of elections important for the whole region's stability.

The oil-producing country, which emerged from a north-south civil war in 2005, is due to hold its first multi-party elections in more than two decades in April, followed by an independence referendum in southern Sudan next year, as part of the Comprehensive Peace Agreement (CPA).

Failure to deliver credible elections could see a return to conflict, with implications not only for Sudan and its oil production, but for the whole region, minister for Africa Glenys Kinnock said.

"We understand these are crucial and critical times for Sudan," she said.

"The risk of a return to further conflict is a real one. We understand and accept that. We know what has to be done, and we just have to get on and do it."

Kinnock said Britain and the international community must pursue "strong and determined engagement" with Sudan, if long-term peace and security was to be secured.

During the past 12-18 months the international community has helped diffuse tensions fuelled by competion for oil revenues in a country divided along religious, ethnic and ideological lines.

The 2005 CPA formed a coalition government between the northern National Congress Party (NCP) and the former southern rebel Sudan People's Liberation Movement (SPLM).