Many US agencies not ready for a flu pandemic - GAO

* Federal agencies "muddling along"

* Few have rehearsed for bad pandemic

By Maggie Fox, Health and Science Editor

WASHINGTON, June 16 (Reuters) - From air traffic controllers packed together in control towers to prisoners denied hand sanitizer for fear they might drink it, many U.S. government agencies would fall short if a dangerous pandemic struck, according to a report released to Congress on Tuesday.

Most agencies have planned to let employees work from home in case of a severe pandemic, but only one has actually tested this idea to see if it might work, the Government Accountability Office found.

The world is experiencing a pandemic of a new flu virus called H1N1 swine flu. The World Health Organization classifies it as a moderate pandemic, but says the virus could change at any time into a more dangerous form.

WHO says H1N1 has killed a confirmed 163 people and says there are likely to be many more deaths. Seasonal influenza is involved in 250,000 to 500,000 deaths annually.

"I think we really need to take a look at what we have learned from this current experience. We have a little bit of time -- we are not in a drastic, severe situation," the GAO's Bernice Steinhardt, who led the study, said in a telephone interview.

Just before H1N1 emerged, Steinhardt's team surveyed 24 federal agencies to find out how well prepared they were for a worst-case scenario. She reported to the Senate Committee on Homeland Security and Governmental Affairs on Tuesday.