Namespace declarations in the source document are translated by the XML
parser into namespace nodes, they are not treated by XSLT as attribute
nodes. Therefore, a namespace declaration can never contain an attribute
value template (because it isn't an attribute).

You need to produce in the result tree a namespace node whose name
(=prefix) is "" and whose string value (=namespace URI) is "test". (It's
very confusing that you chose to use the name "prefix" to refer to the
namespace URI!

In XSLT 2.0 you can do this with

<xsl:namespace name=""><xsl:value-of select="@prefix"/></xsl:namespace>

In 1.0 there is no direct way of doing this. The nearest equivalent is:

<xsl:variable name="dummy">
  <xsl:element name="e" namespace="{@prefix}"/>
</xsl:variable>

<xsl:copy select="xx:node-set($dummy)/*/namespace::*[.=@prefix]"/>

This creates a dummy element in the required namespace, and then copies
the required namespace node to the result tree.

thanks,
christian