Sudan's impoverished east is a volcano waiting to erupt because anger is rising over a lack of economic development and an abundance of arms, a U.N. agency quoted an official as saying in a report.

Sudan's government is fighting armed insurgents in the Western region of Darfur and two southern border states which all complain of economic and political marginalisation in the African country.

The east is crucial to Sudan's oil-driven economy as it contains the only commercial port and miles of pipeline. The Eastern Front, an east Sudanese movement, signed a peace deal with Khartoum in 2006 ending a lingering insurgency, but complaints of neglect continue. Small anti-government protest have erupted in the city of Kassala near the Eritrean border in the past few months.

The east is a volcano waiting to erupt, an official working with the U.N. Development Program (UNDP) in Kassala said, according to a report by the Integrated Regional Information Networks (IRIN) published on its website.

IRIN is a media agency affiliated with the United Nations Office for the Coordination of Humanitarian Affairs though their reports do not necessarily reflect official U.N. policy.

The report quoted the UNDP official as saying Beja tribal fighters were gathering in Hamid Mountains on the Eritrean side of the border to east Sudan.

Unofficial sources have already reported that they organised attacks in Sudanese territory three months ago, said the UNDP source, according to the report.

IRIN quoted Beja community leader Mohamed Ali Adam as saying

many in his community think that the situation hasn't improved for them even five years after the war. They have still no access to facilities such as schools as promised by the government.

Information Ministry official Rabie Abdelati dismissed the report as inaccurate, saying a large development program was underway in the east.

There is a development program ongoing in the east, much financial aid. Leaders from the east are part of the new government, he said.

Events in east Sudan are hard to verify because journalists and diplomats need travel permits to go there.

Sudan has been struggling with a severe economic crisis since South Sudan took away much of the country's oil production when it became independent in July. Oil is the lifeline of both economies.

(Reporting by Ulf Laessing; Editing by Matthew Jones)