By Tim Large

LONDON (Reuters) - Military action against the Lord's Resistance Army (LRA) could plunge northern Uganda into another nightmare of fear and misery, the leader of the tribe most affected by the rebel group's insurgency said on Thursday.

Uganda's army says it has agreed with Sudan and the Democratic Republic of Congo to jointly fight the cult-like LRA if peace talks with its elusive leader Joseph Kony fail.

But Rwot David Acana, the paramount chief of the Acholi tribe of which Kony and his fighters are also members, said the gains of 18 months of fragile peace were too precious to squander on a hasty resort to military strikes.

"The military option should wait," he told Reuters in an interview. "Let's explore peaceful means... The people at home still have hope. If they have hope at home, the international community should also have hope."

Acana was in London to urge the British government -- a key donor to Uganda -- to keep supporting the peace process.

Kony snubbed mediators in April after raising hopes that he would sign a final peace deal to end over two decades of war that has killed tens of thousands and displaced 2 million more.

The former alter boy and his fighters are thought to move between camps in northeast Congo and neighbouring Central African Republic. The rebels have also used Sudan as a base in the past, terrorising the Acholi people with cross-border raids.

Kony is wanted by the International Criminal Court for multiple war crimes including massacres, rapes and abducting thousands of children to use as fighters and sex slaves.

Acana, an observer at the peace talks, met Kony in September and made contact through intermediaries in late April after the LRA leader failed to show up at a signing ceremony on the Sudan-Congo border.

"As far as the signals go that I'm getting personally now, he still saying he hasn't abandoned the talks," he said.

At the height of the conflict, 90 percent of the Acholi population was forced into squalid camps for the displaced, leaving them vulnerable to disease, hunger and abduction by rebels. Studies showed the conflict claimed 1,000 lives a day.

Acana said the percentage of Acholi people in the camps had fallen to 38 percent thanks to the peace process -- although many returnees were still living a precarious half-way existence under the shadow of the war.

"They are not entirely abandoning the main camps," he said. "They are still putting their valuable assets in the camps. If there's any military action, then there will be a reflex action and they'll suddenly go back."

Rather than resorting to force and risking a full-scale resumption of LRA atrocities, he said the challenge was to help northern Ugandans repair their shattered livelihoods and make peace "irreversible".

"The people should be assisted in getting back their status, getting back their dignity," he said.