* NZ and Australian officials discuss refugee screening - NZ PM
* Sign NZ's offer to take 150 Manus refugees could still go ahead
* Australian PM has publicly rejected the offer (Adds refugee group's comments; paragraphs 4-7)
By Charlotte Greenfield
WELLINGTON, Nov 20 (Reuters) - New Zealand and Australia have begun talks about screening procedures for asylum seekers holding out in a Papua New Guinea detention centre, New Zealand Prime Minister Jacinda Ardern said on Monday, amid reports of worsening health conditions there.
Australia has been refusing New Zealand's offer to take up to 150 of the detainees from the Australian-run camp on Manus Island, but Ardern's comments have raised speculation that Australian Prime Minister Malcolm Turnbull is ready to accept.
The centre was closed almost three weeks ago after PNG's High Court ruled it was illegal, but more than 400 detainees have refused to leave, citing concerns for their security if they were moved to transit centres as planned.
More than 150 men at the centre were seriously ill without access to basic first aid or medicine, said advocacy group Asylum Seeker Resource Centre (ASRC), which is calling for safe resettlement of the men.
A team from the group, which is based in Australia, visited the centre last Wednesday, a spokeswoman said.
"The deteriorating state of the men's bodies was obvious to me as I was shown around," said Jana Favero, the group's campaigns director. "This is a medical emergency festering inside a humanitarian crisis."
Medical conditions requiring urgent care ranged from chest pain and undiagnosed episodes of unconsciousness to infections and chronic diahorrea among others, the group added.
Turnbull has been refusing New Zealand's offer as he worries asylum seekers could view it as a "back door" to Australia, undermining the country's tough immigration policies.
Ardern said the conversations were about establishing the screening processes.
"To be clear, we have not started that process," she told Radio New Zealand. "But I think that certainly we're a bit further along than we have been before - we haven't even had officials having those discussions in the past."
The United Nations, which has warned of a "looming humanitarian crisis", last week urged Australia to accept New Zealand's offer to take the men.
Turnbull has insisted the priority was an existing refugee swap deal negotiated last year with former U.S. president Barack Obama.
The men holed up in the camp depend on erratic food supplies smuggled in by supporters. They lack power and running water.
Australia's "sovereign borders" immigration policy that refuses to let asylum seekers arriving by boat reach its shores has been heavily criticised by the United Nations and human rights groups, but has bipartisan domestic political support.
(Reporting by Charlotte Greenfield. Additional reporting by James Regan; Editing by Jane Wardell and Clarence Fernandez)
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