UPDATE 4-Monsoon rains test cash-strapped Pakistan after 200 die

* Unpopular government faces another test

* Families flee flood-hit areas

* Vital agriculture sector hit (Adds quotes from flood victim, Pakistan High Commissioner, changes dateline)

By Hamid Shaikh

TANDO MUHAMMAD KHAN, Pakistan, Sept 12 (Reuters) - Pakistan's cash-strapped government, struggling to help victims of last year's devastating floods, faces another major test as monsoon rains, which have already killed about 200 people in recent weeks, sweep across the south.

Flood waters across Sindh province have also destroyed or damaged nearly one million houses and flooded 4.2 million acres since late August , according to the United Nations Office for the Coordination of Humanitarian Affairs.

Prospects for further flooding would put Pakistan's unpopular government, already battling Taliban militants, allegations of widespread corruption and public anger over power cuts and poverty, under immense pressure.

"The situation in Sindh is already serious and there will be more flooding and more problems because of these rains," said meteorology department official Arif Mehmood.

Neighbouring India has also been hit by floods, which have killed more than 300 people and affected close to nine million since monsoon rains started in June, said the Indian Red Cross.

"As the rain already started a few months ago, in some places, the water has receded... There is fear in some of the states regarding outbreaks of diseases like diarrhoea arising from poor hygiene and sanitation," said John Roche, country representative for the International Federation of Red Cross.

Zafar Qadir, chairman of the National Disaster Management Authority, said Pakistan faced a crisis "of great magnitude".

In the town of Tando Muhammad Khan, residents who watched water rise to about eight feet and rush through homes and shops feel helpless. Water has been stagnant for a week in some areas.

Some, like 15-year-old student Sonam, were so shaken they concluded conditions were worse than last year's floods. "The entire blame goes on the government," she said.

Pakistan's military, which has ruled the country for more than half of its history, took charge of rescue and relief operations during last year's floods, while the government was seen as slow and ineffective.

Still, more than a year later, over 800,000 families remain without permanent shelter, according to aid group Oxfam, and more than a million people need food assistance.

Pakistan's High Commissioner in London, Wajid Shamsul Hasan, told Reuters international support was needed.

"The unprecedented torrential rains followed by flooding were the last thing one would have expected to hit the country already head-deep involved in war against terrorism besides already facing enormous problems including an acute energy crisis and a challenging law and order situation," he said.

Pakistan may also have lost up to two million cotton bales, or about 13 percent of its estimated crop, due to heavy monsoon rains during harvesting in Sindh, government and industry officials said.

"The water flow to the sea is very slow. The drainage system has choked...the agriculture system could not stand the water pressure. So the devastation became immense," said Qadir.

WEAK ECONOMY

Monsoon rains sweep the subcontinent from June to September and are crucial for agriculture.

Pakistan, which relies heavily on foreign aid and an IMF emergency loan package, cannot afford heavy losses in the agriculture sector, a pillar of the economy.

The 2010 floods killed about 2,000 people and made 11 million homeless in one of Pakistan's worst natural disasters.

One-fifth of Pakistan was then submerged in water -- an area the size of Italy -- and the government faced a $10 billion bill to repair damage to homes, bridges, roads and other infrastructure.

Aid workers expressed fears over possible outbreaks of diseases linked to the new floods, especially among children.

"The biggest issue is that they will drink water from anywhere, so water-borne diseases are a threat, especially diarrhoea and cholera," Sami Malik, a spokesman for the United Nations Children's Fund, told Reuters. (Reporting by Zeeshan Haider and Qasim Nauman in Islamabad; Sahar Ahmed in Karachi, and Reporting by Arup Roychoudhury, Nita Bhalla and Mayank Bhardwaj in New Delhi, Jatindra Dash in Bhubneshwar and Myra MacDonald in London.; Writing by Michael Georgy)