* Nothing to hide over 2010, sports minister says
* Graft allegations undermine South Africa's proudest moment
* U.S. says Pretoria was prepared to pay $10 million bribe (Adds quotes, details, background)
By Ed Cropley
JOHANNESBURG, May 28 (Reuters) - South Africa's sports minister jumped to defend the nation's reputation on Thursday following U.S. allegations that the government was involved in bribery to secure the 2010 World Cup, the crowning achievement of the post-apartheid state.
The minister, Fikile Mbalula, was adamant the government had done no wrong in securing the event that South Africans associate with their first democratic president, Nelson Mandela, saying outside auditors had given a clean bill of health to all financial accounts relating to the soccer spectacular.
He also accused U.S. Attorney-General Loretta Lynch of a breach of diplomatic trust for failing to hand over a copy of an indictment that implicates two senior unnamed South African soccer officials in corruption.
"Let them not actually label us with the mud. Let them respect us and we will collaborate with them. We've got nothing to hide as a nation and as government," Mbalula told a news conference. "We are not a small fish in the world. We must be respected equally."
Lynch said on Wednesday that Jack Warner, a former vice president of the FIFA governing body, solicited $10 million in bribes from the South African government to host the tournament. Warner said he is innocent of any charges.
Mbalula promised to collaborate with the U.S. Department of Justice investigators once they had shared their findings.
However, his response indicated how the allegations stemming from a long inquiry into FIFA have cut to the quick in South Africa.
When it won the right to host the event in 2004, 10 years after the end of apartheid, South Africa attributed the victory to the charisma and diplomatic skills of Mandela, who had by then retired as president.
"I feel like a young man of 15," the then-86-year-old said, pressing the golden World Cup trophy to his cheeks in what became an image of rare African triumph.
The president of the time, Thabo Mbeki, put it in grander terms. "Africa's time has come," he declared. "We want to ensure that, one day, historians will reflect upon the 2010 World Cup as a moment when Africa stood tall and resolutely turned the tide on centuries of poverty and conflict."
To many South Africans, suggestions that the decision may have been based more on fistfuls of dollars in a Paris hotel room than Mandela's winning smile or the continent's growing sense of self-worth is deeply upsetting.
"If it's true, it's a sad thing because we all had a happy and successful World Cup, initiated by the Big Man himself," said 48-year-old Johannesburg security guard Jakes Tjiane. "But if there's smoke, there must be fire."
The U.S. indictment alleges that a "high-ranking South African bid committee official" flew to Paris with a briefcase of dollar bills wrapped into $10,000 bundles to give to a relative of Warner, who is from Trinidad.
It also alleges the South African bid committee and government were later prepared to pay $10 million to the Caribbean Football Union to "help the African diaspora", an offer that was interpreted as an incentive for Warner to vote for the South African bid.
It adds that when "the South Africans were unable to arrange for the payment to be made directly from government funds", FIFA officials coughed up on Pretoria's behalf, using funds that would otherwise have been handed over to help it host the event.
Danny Jordaan, head of the South African 2010 bid and organising committee, refused to answer questions about the allegations on Thursday at a news conference to mark his election as mayor of the coastal city of Port Elizabeth. (Additional reporting by Nqobile Dludla and Peroshni Govender; editing by David Stamp)