V IENTIANE, Laos - Cambodia's fragile relations with its northern neighbor appear to have been dealt a further blow with the decision by the Lao government to restrict border traffic.

Reliable sources on the border report that in May, in an completely unpublicised move, Laos introduced strict controls on the largely unregulated traffic across the frontier between the two countries.

Official crossing points and customs facilities have been established and entry is prohibited to travelers without passports or correct documentation - even those with family members in Laos.

Underlining the seriousness of the situation, provincial authorities have deployed additional troops along the Cambodian border to police the new regulations, the sources say.

The crackdown comes after what seemed to be a considerable effort by the two nations to improve relations. This peaked last November during an official visit to Phnom Penh by Lao Prime Minister Khamtay Siphandone, during which Khmer officials offered landlocked Laos 'completely free access' to the sea via Cambodia.

It also occurs in the midst of a growing recognition of the economic importance of the deep south of Laos which, as one Lao businessman put it "is rapidly shaping up as an area of enormous economic potential in logging, tourism, hydro-electricity and mineral exploration."

The Lao-Khmer border, an approximately 250-km of deep jungle and treacherous rivers, remains the remote home to impoverished ethnic minorities and is one of the most underdeveloped parts of Indochina.

Prospering from its position as middle-man for trade between Vietnam, Cambodia and Thailand, Pakse, the provincial capital of Champassak province, is an ethnic Lao stronghold and a free-wheeling commercial center typical of towns along the Mekong valley.

The cosmopolitan feel of Pakse gives way to a different atmosphere deeper into the Lao border provinces of Champassak and Attapeu in the far south-east corner of Laos.

Sixty percent of Attapeu's population are members of the Lao Theung ethnic group, the country's indigenous inhabitants and the backbone of the Pathet Lao's southern forces during the Vietnam war. Roads and communications are poor and the province can only be accessed by boat during the wet season.

Non-government organization workers who have visited Attapeu say that some areas are so isolated that communities are effectively de-monetarized and have to rely on barter with itinerant salesmen for essential goods.

International donors have began survey work to upgrade the stretch of Road 13 which runs between Savannakhet - one of the possible locations for the second Mekong bridge - through Champassak to the Khmer border.

Road 13 will then form part of the Asian Development Bank's planned southern Lao-Sihanoukville road project, the details of which were announced at a sub-regional meeting of donors in Hanoi in late May.

It is not known what impact, if any, Laos' latest decision will have on these plans and Cambodia's offer of access to the sea.

Problems between Laos and Cambodia can be traced to the defeat of the State of Cambodia party, a long-time ally of the Lao leadership, in last May's UN-sponsored elections.

While the results appeared to have no visible effect in Vientiane, according to a source near the border, it led to "a definite cooling in relations between the Khmer and provincial authorities on the Lao side. There was not as much dialogue as there was in the past; things became less clearly defined."

The decision to tighten the border, which could only have been done with the backing of central authorities in Vientiane, indicates this sentiment has since spread beyond the province level.

"After a period of stressing commonalties, the Lao government now seems to be afraid of the ideological difference posed by Cambodia. They fear Phnom Penh could be a bad influence," the source said.

Cambodia, with a monarchy and multi-party political system is in sharp contrast to Laos which has repeatedly stressed it will allow no challenges to the Lao People's Revolutionary Party's two-decade rule.

The border move coincides with a high-profile effort by the Lao government to re-affirm its control following the opening of the Friendship bridge to Thailand in early May.

The same source said the apparent about-face in relations with Cambodia also comes from Laos' desire to isolate itself from the collapse of law and order on the Khmer side of the border.

"There is a feeling that Stung Treng and Preah Vihear have become completely lawless, that those who have the guns have all the power, and that increasing banditry and official corruption among the local authorities make it difficult for the central government to exercise any control over these provinces," the source said.

The most overt example was the continued use of explosives by Cambodian fishermen along the Mekong River. While depleting fish stocks, the practice is also proving a threat to the rare Irrawaddy dolphins which inhabit the river and its tributaries along the border between Stung Treng and Champassak.

Illegal in both countries, laws against explosives fishing, strictly enforced in Laos, are ignored in Cambodia because the very people who are supposed to enforce them, the Cambodian police and soldiers, are the ones promoting explosives fishing and selling explosives.

There is speculation that the provincial government in Stung Treng is loathe to crack down on the practice and jeopardize the taxes they make on large fish captures. Local Lao fishermen, meanwhile, have been scared to confront the Khmer fishermen, most of whom are armed.

While a ban on imported fish from Cambodia, issued by the Lao government last December, appears to have put a halt to the practice, there have been numerous other instances of lawlessness spreading into Laos.

Over the last year, stories have reached Vientiane of Khmer bandits crossing into Laos to rob buses and cars. In the most celebrated instance, in March this year, Khmer police opened fire on a boatload of officials from the Tourism Authority of Thailand, after they had refused to pull over when the police accused them of violating Cambodian territory.

According to some accounts, the security situation has become so bad that several private travel companies in Vientiane have suspended tours to the border area.

A lesser-known, but important motivation for Vientiane may be reports of increasing Khmer Rouge activity on the border, particularly in the region's thriving timber trade.

Despite sustaining enormous damage during the Vietnam war, Laos still has approximately 47 per cent of its original forest cover, among the last untouched stretches of tropical rain forest left in southeast Asia. Most of this is centered in the south, along the borders with Vietnam and Cambodia.

The possibilities for timber export were minimal until economic reforms began to open up the country in the late-eighties. Then, between 1987 and 1988 alone, over 120 joint ventures in the timber industry were established, most with Thai partners.

In response, in 1989 the Lao government imposed a strict quota system for logging.

While the Lao authorities have held firm in the face of strong pressure to overturn this system, many believe their resolve is being weakened by the surge in new road construction, allowing loggers to reach previously hard-to-access areas, and the prospect of massive earnings from the timber industry.

Roads on the outskirts of Pakse are now jammed with convoys of trucks hauling processed timber and freshly cut logs to buyers in the Thai town of Ubon Ratchathani.

Much of the timber is illegally taken from Laos by Khmer logging companies which haul the logs back into Cambodia, sell them to Lao middle-men who, in turn, re-sell them to Thai companies.

More recent reports suggest Khmer Rouge units operating in the remote northeast of Cambodia are using these Khmer and Lao companies as fronts to sell logs to Thailand.

While Khmer Rouge units are known to have been operating 30-40 km from the border for some time, these reports go some way towards substantiating rumors, that the guerrillas are attempting to build business links on the Lao border.

The Cambodian government is concerned that by opening up an economic front with Laos, the Khmer Rouge may be able to by-pass attempts to cut off the guerrilla faction from its income generating activities on the Thai border. In May, Cambodian co-premier Hun Sen sent a personal plea to Vientiane to crack down on Lao companies involved in the laundering of logs.

For their part, the authorities in Pakse are said to be at a loss as to how to police logging activities with the small resources they have at their disposal: 113 poorly-paid officials, one truck, two motorcycles and a bicycle.

Tightening the border achieves the Lao government's twin goals of trying to stop the trade in logs, which is endangering forests in the south as well as providing income to the Khmer Rouge, and preventing Cambodia's long-standing civil war from spilling into Laos.

In the lead up to the Vietnamese invasion of Cambodia in late 1978, which Laos supported, Khmer Rouge and Lao troops fought several skirmishes on the border, and Vientiane later accused the Khmer Rouge of supplying arms and training to Lao rebels opposed to its rule from their bases inside Stung Treng.

The rebels, made up primarily of ex-members of the Royal Lao Army operated under the title of the National United Front for the Liberation of the Lao People. At their peak, foreign intelligence estimates put the Front's numbers at between 1,000-1,500 troops.

The rebels had some success along the Lao-Khmer border throughout the early 'eighties, ambushing vehicles and attacking military camps - in one incident, killing a Soviet advisor. The Lao government also claimed the Khmer Rouge played a key role in smuggling Thai-based anti-Phathet Lao insurgents into Laos.

Although, coordinated activities between Vietnamese, Lao and Khmer troops put an end to the Front as a serious force by 1983, recent stories in the Bangkok media, confirmed by several Lao residents in Champassak, suggest there is renewed activity by elements of the anti-Vientiane resistance in the south.

In late August, Lao troops clashed with the resistance on the border between Thailand and Saravane, a heavily forested province north of Champassak.

Early this year, a column of rebels were reported to have entered Lao from bases in Thailand and moved to the frontier between Champassak and Cambodia.

Although one estimate put the group's strength at about a hundred, no firm details are known about their exact size or activities and there have been no recent reports of any military encounters.

One theory is that the rebels are looking for alternative bases in the wake of a crackdown on their activities by Thai authorities who are eager to improve relations with Laos.

In the past, the rebels received assistance from right-wing groups in Thailand and the United States and were accused of using Thai territory to launch military incursions against the Vientiane government.