By Nick Tattersall

DAKAR, Aug 12 (Reuters) - A small African aid group credited with starting a grass roots campaign to abolish female circumcision in West Africa has been awarded the world's largest humanitarian prize, jurors said on Sunday.

The Senegal-based Tostan, which means 'breakthrough' in the local Wolof language, has been chosen for the $1.5 million Hilton Prize, whose past winners include the hospice movement, Doctors Without Borders and the International Rescue Committee.

The group, which has just 370 almost exclusively African staff, uses traditional song, poetry, theatre and dance to educate some of the poorest villagers in Senegal and neighbouring countries about development and human rights.

Founded in 1991 by Molly Melching, an American who has lived in Senegal for 32 years, one of Tostan's achievements has been to encourage thousands of women to speak out against female genital cutting, long a taboo subject in Muslim West Africa.

"There are many great things about Tostan and its leadership but the most important is (Melching's) freshness of approach and ability to think differently," Nobel Prize winning economist Amartya Sen, one of the Hilton Prize jurors, told Reuters.

"She has put new thought into the discussion about how you get a critical proportion of the population to agree and act in unison, to be an example to others," he said.

Tostan's grass roots approach, using indigenous African languages and working in the poorest communities, has drawn comparisons with the campaign to wipe out foot binding in China, once a similarly deeply-rooted cultural phenomenon.

When the women of Malicounda Bambara, a village south of Senegal's capital Dakar where Tostan is active, publicly abandoned female genital cutting 10 years ago, they were the first community in the region to do so.

Refusing to be circumcised risked leaving the village ostracised as its women were no longer deemed fit to marry, and potential husbands looked elsewhere. But as word spread, neighbouring villages joined the initiative.

Today, nearly half of Senegalese villages have made similar declarations, along with 298 in Guinea and 23 in Burkina Faso, a fact celebrated in Malicounda Bambara last month when villagers from across the region came to mark the 10th anniversary.

SINGING AND DANCING

Melching founded Tostan after setting up a centre in Dakar to educate street children using language and culture familiar to them -- the village songs, dance, stories and theatre that are part of the fabric of life in rural Senegal.

"We started realising how important it was to use the traditional means of communication that people have here in Africa in order to teach," Melching told Reuters.

"We really researched traditional games, stories and songs used at ceremonies like marriages and baptisms. There were songs the women sang when they were harvesting millet. Or if they went to the well, there were different songs for the rain to come."

One particularly successful example Melching recalled was a nonsense song commonly sung by mothers to their children.

"We took the nonsense song and put in the letters of the alphabet so that people could learn in Wolof. It was really empowering to the villagers that we were giving value to what they do already," she said.

The philosophy developed, and Tostan now runs "Community Empowerment Programs" -- using the same techniques to teach about everything from forced marriage to microfinance -- in hundreds of villages in Senegal, Guinea, Gambia, Mauritania and Somalia. It will soon also start in Djibouti.

Tostan was one of nearly 250 nominees for the Hilton Prize, awarded each year since 1996 by the Conrad N. Hilton Foundation established by the late hotel entrepreneur. Melching will travel to New York in September to receive the honour at a ceremony due to be attended by U.N. Secretary-General Ban Ki-moon.

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