North Korea squeezes South with border clampdown

North Korea slashed the number of South Korean workers at a joint industrial enclave in the North in a border clampdown seen as a pressure tactic to change Seoul's tough policy towards its neighbour.

The move comes just a week before destitute North Korea is expected to discuss a disarmament pact with five regional powers which promises Pyongyang economic and energy aid for taking apart its nuclear programme and allowing inspections.

South Korean officials said last week they had reached a deal where more than 1,600 of the nearly 4,200 South Koreans permitted to work at the joint factory park in Kaesong would remain.

But late on Sunday, North Korea then further cut that number and only allowed in 880, the South's Unification Ministry said.

"The border restriction measures impede production and decrease market confidence," ministry spokesman Kim Ho-nyeon told a news briefing.

"The measures are in violation of prior inter-Korean agreements. They cannot be justified and should be abolished."

Last week, South Korea cut runs of a highly symbolic freight train across the heavily armed border and ended tours to the city of Kaesong ahead of the North's clampdown on the one remaining land crossing between the states, which have yet to officially end their 1950-53 war. North Korea allowed the limited number of South Koreans to cross the border without incident. They are keeping nearly 90 factories running at the park that employs about 33,000 North Koreans.

The Kaesong factory complex, about 70 kilometres northwest of Seoul, produces items such as watches, shoes and kitchen goods. It has provided North Korea's leaders with hundreds of millions of dollars.

"The factories are running as usual," said Kim Min-kyung, a South Korean official at the industrial park in North Korea.

Analysts said the North may not go as far as closing the factory park because it could further damage North Korea's already tainted image as a reliable business partner just as it is appealing for more overseas investment.

Ties between the two Koreas have chilled since President Lee Myung-bak took office in February and ended unconditional aid to the communist state, saying Seoul would tie its largesse to moves the North makes to end its nuclear arms programme.