By Stephanie Nebehay

GENEVA, Nov 23 (Reuters) - Health officials have failed to reach agreement on a new system to ensure developing countries benefit more from sharing bird flu virus samples used to develop vaccines, the World Health Organisation said on Friday.

Developing states like Indonesia -- which with 91 of the 206 human bird flu deaths since 2003 is the hardest hit country -- want guarantees from richer nations and drugmakers that they will have access to cheap vaccines if they share samples.

Sharing samples is deemed vital to see if viruses have mutated, become drug resistant or grown more transmissible.

The WHO agreed last May to revamp its 50-year-old system for sharing flu virus samples with researchers and drug firms. It had wanted its 191 member states to adopt an agreement by May but divisions remain.

"Nobody can fault you for not trying... It is so close yet so far away," WHO director-general Margaret Chan told the final session of the four-day talks.

The next step was not yet clear, but it was likely officials would meet in a smaller working group ahead of the WHO's annual assembly in May, WHO spokesman Gregory Hartl said. But a fuller session would be needed afterwards to clinch a deal.

Experts fear the constantly mutating H5N1 virus could change into a form easily transmissible among humans and sweep the world in months, killing millions of people.

Indonesia wants countries who share samples to have full control of their use and access to vaccines.

"We must have equitable sharing of benefits arising from the use of viruses through a fair, transparent and equitable mechanism. It is the moral thing to do," Health Minister Siti Fadillah Supari said on Tuesday.

Under its proposal, any commercial use of the virus would require prior consent of the country providing it -- which Jakarta said would retain the intellectual property rights and have access to global vaccine stockpiles at an affordable price.

Nigeria supported Indonesia, saying the sharing of virus samples as well as benefits should be made "mandatory for all".

John Lange, U.S. special representative for avian and pandemic influenza, ruled out any automatic reward for sharing.

Research and development of vaccines was "very risky, time-consuming and extremely expensive" and it was critical to protect patents to ensure their continued development, he said.

Sixteen companies are licensing a vaccine against H5N1, the virus most experts suspect could spark a pandemic. They include Novartis <NOVN.VX>, Glaxo <GSK.L>, Denka Seiken <4561.Q>, Baxter <BAX.N>, CSL <CSL.AX> and Sanofi Pasteur <SASY.PA>. (Editing by Michael Winfrey)

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