Scores of troops and civilians were injured in the clash, Upper Nile State Information Minister Peter Lam Both said.
The oil-producing south voted to separate from the north in a January referendum promised in a 2005 peace deal that ended decades of civil war in Sudan. Since the historic poll, the region has been beset by violence and insecurity.
The southern army (SPLA) is at war with at least seven rebel militia, and traditional tribal clashes have intensified with the onset of the rainy season, according to the United Nations, which says more than 800 people have been killed this year.
Analysts warn the south risks becoming a failed state and destabilising the region if it cannot control the crisis, with tens of thousands displaced by the various conflicts affecting nine of its ten states, according to the United Nations.
The SPLA clashed on Saturday with forces loyal to renegade army commander Gabriel Tang during what was meant to be the reintegration of his forces into south Sudan’s army, Both said.
“We understand that on the side of (Tang’s forces) 55 were killed including five of his generals,” Both told Reuters, adding his information had come from the south Sudan army.
“We don’t have reports of those killed from the SPLA and civilian sides but the (overall) death toll must be much higher,” he said, adding the state capital Malakal had received 34 wounded SPLA soldiers and 43 civilian injuries.
The clashes happened south of Malakal, just across the border in Jonglei state, Both said.
In a separate incident in Jonglei, a Sudanese employee of the U.N. World Food Programme (WFP) was killed on Friday in an ambush by unknown assailants, WFP said in a statement on Sunday.
In neighbouring Unity State, renegade SPLA officer Peter Gadet this week began a sustained assault against the SPLA, with at least 45 people killed so far, officials said. A spokesman for Gadet says the offensive will continue “until victory”.
Oil production in the state was disrupted by the violence, according to state officials, who said they first expelled then re-admitted northern Sudanese workers to oil areas, underscoring the threat insecurity poses to the economy.
Unity State Information Minister Gideon Gatpan Thoar could not confirm on Sunday whether the workers had yet returned.
Some 98 percent of the south’s budget comes from oil revenue, and how it shares its oil with the north after independence remains unresolved.
It is currently spilt roughly 50-50 and the only pipelines to export the oil run through the north. The petroleum ministry could not say how much of the around 500,000 bpd of production was affected by the violence.
The southern government accuses the north of sponsoring the militia groups fighting the SPLA, an allegation Khartoum denies.
Rebel groups accuse the government of plotting to stay in power indefinitely, not fairly representing and supporting all tribal groups while neglecting development in rural areas.