The humanitarian group said it needed the money to kickstart plans to move almost 100,000 refugees from Africa's longest civil war back to their homes in South Sudan next year.
"The lack of even minimal funding at this critical stage ... puts a major question mark on this being possible," said IOM Chief of Mission in Sudan, Mario Tavolaj. The entire 2008 operation could grind to a halt in January without extra funding, the agency added.
Humanitarian agencies have struggled to keep up with the demand from South Sudanese families to leave camps, many of them around the capital Khartoum, and return to their homes in the semi-autonomous south.
Last month the United Nations refugee agency said it had an $11.1 million funding gap for the rest of this year. The U.N. High Commissioner for Refugees (UNHCR) had hoped to return 102,000 refugees but by October had only brought 42,000 home.
The IOM said funds were running low just as staff were preparing to set up a logistics system for next year's returns and repair a string of way stations damaged during recent floods and heavy rains.
Fresh funding was expected in March 2008, said spokeswoman Sophia Opitz. But until then, they were facing a serious funding gap. "It is just a dry spell, but it is a key dry spell."
The IOM said it had already helped move 60,480 South Sudanese by land, barge and air since 2006. More than half a million South Sudanese registered their intent to return home in surveys taken in 2006.
About 2 million people were killed and 4 million displaced during Sudan's north-south civil war which lasted more than two decades and ended in 2005.
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