By David French

DUBAI (Reuters) - The Gulf emirate of Ras Al Khaimah said an effort to negotiate the recovery of $1.5 billion it says it lost to fraud had ended without result and further criminal charges could be sought against the former senior official it alleges was responsible.

In a statement this week, the Ras Al Khaimah (RAK) government said it had been in talks with Khater Massaad in relation to "global embezzlement and mismanagement of $1.5 billion" during his tenure as chief executive of the Ras Al Khaimah Investment Authority (RAKIA).

The falling out between RAK and Massaad is a rare public disagreement between those running state investment bodies in the Gulf, where decision-making is dominated by a small clique of powerful individuals, making outside scrutiny over business practices extremely difficult.

The negotiations, which a spokesman for the government told Reuters had lasted for two years and had aimed to reach a settlement to "recompense the government of RAK", were ended by Massaad, the government statement said.

In response, a spokesman for Massaad said in a statement that Massaad "completely refutes these spurious and unsubstantiated accusations", adding the former RAKIA head was still owed "significant remuneration" for his role in developing the state body.

The Massaad spokesman made no reference to the talks or any decision by the businessman to end them. Nearly all recent legal attempts by RAKIA against Massaad, he said, "have failed and been denied by several courts across a number of international jurisdictions".

Reuters was unable to determine Massaad's current location.

RAKIA is a state body aimed at attracting investment to the emirate of 300,000 people, one of the poorer parts of the UAE and whose economy is mostly light manufacturing, through measures such as running free trade zones.

It has also made overseas investments in the past, although this activity has ceased in recent years.

Massaad ran RAKIA from 2007 until 2012. He was a prominent member of the emirate's business community for a number of years prior to that, including as an advisor to the ruler of RAK, Sheikh Saud bin Saqr al-Qasimi.

He was also behind the establishment of RAK Ceramics - the emirate's most prominent company and one of the largest makers globally of porcelain goods.

The RAK government spokesman added RAKIA has handed "materials" to relevant authorities, with the decision on whether to proceed with criminal charges in their hands. He declined to elaborate on the nature of the materials.

Prosecutors in RAK were in the process of investigating criminal complaints lodged by RAKIA, while civil proceedings were also being considered in a number of jurisdictions, he added.

One prosecutor at the RAK Public Prosecution Department declined to comment when reached by Reuters. Another prosecutor didn't immediately return phone calls.

The RAK government said in its statement that Massaad had already been tried and convicted by the United Arab Emirates Criminal Courts in absentia on corruption and fraud charges in 2015.

When asked if the RAK government had previously attempted or planned to ask for Massaad to be extradited to the UAE, the RAK government spokesman said any such decision would be made by prosecutors in the emirate.

(Additional Reporting by Abeer Abu Omar; Editing by William Maclean and Alexandra Hudson)