By Mike Oboh

KANO, Nigeria, Dec 5 (Reuters) - The Nigerian state of Kano is pulling out of talks with drugmaker Pfizer <PFE.N> about a possible out-of-court settlement over a 1996 drug trial that Nigeria says killed 11 children, an official said on Wednesday.

The northern state is suing Pfizer for $2 billion in damages and trying to press criminal charges over the testing of the drug Trovan on children in Kano during a meningitis epidemic. The federal government is suing for an additional $6.5 billion and also trying to press criminal charges.

Nigeria alleges Trovan was responsible for the deaths of 11 children and caused permanent health problems for dozens of others. It also says Pfizer did not obtain proper regulatory approval for the trial and misled parents.

Pfizer denies all the charges. It argues it was meningitis, not Trovan, that killed the children or damaged their health. It says Trovan saved lives and was as effective as the other, established drug used for comparison in the trial.

The federal and state governments had embarked on an out-of-court negotiation process with Pfizer and several meetings took place over the past few weeks. The next one is supposed to take place in London on Dec. 12.

But the Kano attorney general and commissioner for justice, Aliyu Umar, said the state would not be taking part because it was dissatisfied with how the talks were going.

"They are just trying to play with our intelligence. They have not shown any seriousness. The Kano team will not go to London to sit with them again," Umar told Reuters in his office shortly after the latest court hearing in the civil case.

The civil and criminal cases are being heard separately in courts in Kano, Abuja and Lagos. They have developed into a tangle of unresolved petitions and side issues, dragging on from one adjournment to the next since May. No witness has been heard and no substantive issue tackled.

In Wednesday's hearing in Kano on the state government's civil suit, the court adjourned the matter until Jan. 28, when it said it would rule on whether it had jurisdiction.

Outside the courtroom, a few dozen people who said they were parents of the alleged victims of Trovan staged a protest against the drugmaker. Some held up placards with the names of their children.

"Pfizer killed my son, Mustapha Tukur, and I want Pfizer punished," read one of the placards.

It was not immediately clear whether the federal government was also abandoning the out-of-court negotiations. Lawyers representing the federal government could not immediately be reached for comment.

Pfizer had issued a statement on the talks from its New York office on Nov. 27 which read: "Pfizer welcomes dialogue conducive to an appropriate resolution of its differences with the federal and Kano state governments and remains committed to any such discussions.

"Unsubstantiated allegations coupled with exorbitant monetary demands, however, will impede that process." (Writing by Estelle Shirbon, editing by Mary Gabriel)

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