Leaders from Egypt, Ethiopia and Sudan signed a co-operation deal on Monday over a giant Ethiopian hydroelectric dam on a tributary of the river Nile, in a bid to ease tensions over regional water supplies.

The leaders said the "declaration of principles" would pave the way for further diplomatic co-operation on the Grand Renaissance Dam, which has stirred fears of a regional resource conflict. No details of the agreement were immediately released.

Egypt, which relies almost exclusively on the Nile for farming, industry and drinking water, has sought assurances that the dam will not significantly cut the river's flow to its rapidly growing population.

Ethiopia, the source of the Blue Nile which joins the White Nile in Khartoum and runs on to Egypt, says the dam will not disrupt the river's flow and hopes the project will transform it into a power hub for the electricity-hungry region

"You will develop and grow and I am with you, but be aware that in Egypt the people live only on the water that comes from this river," Egyptian President Abdel Fattah Al Sisi said.

Ethiopia's Prime Minister Hailemariam Desalegn told the gathering in Khartoum: "I reaffirm that Ethiopia's Grand Renaissance Dam will not cause any harm to downstream countries."

Addis Ababa has long complained that Cairo was pressuring donor countries and international lenders to withhold funding from the project.

The 6,000 MW dam is being built by Italy's Salini Impregilo SpA.-Reuters