MILAN (Reuters) - The bird flu virus, widespread inIndonesia, could mutate and cause a human influenza pandemic,the United Nations' Food and Agriculture Organization (FAO)said on Tuesday.

"I am deeply concerned that the high level of viruscirculation in birds in the country could create conditions forthe virus to mutate and to finally cause a human influenzapandemic," FAO Chief Veterinary Officer Joseph Domenech said ina statement.

Avian influenza mostly attacks birds but its deadly H5N1strain has killed 235 people around the world among 372 knowncases since its outbreak in 2003 in Asia.

"The human mortality rate from bird flu in Indonesia is thehighest in the world and there will be more human cases if wedo not focus more on containing the disease at source inanimals," Domenech said.

Bird flu has hit 31 out of 33 provinces of Indonesia withan endemic virus in Java, Sumatra, Bali and southern Sulawesiand sporadic outbreaks reported in other areas, Rome-based FAOsaid.

Despite major control efforts, Indonesia has failed tocontain the spread of bird flu in poultry in the country whereabout 20 percent of 1.4 billion chickens are scattered inaround 30 million backyards, Domenech said.

"We have also observed that new H5N1 avian influenza virusstrains have recently emerged, creating the possibility thatvaccines currently in use may not be fully protecting poultryagainst the disease," he said.

A highly decentralized administration, under-resourcednational veterinary services, thin international and nationalfinancial and human resources for control campaigns are amongthe major problems that Indonesia has to deal with in fightingthe virus spread, he said.