Seoul: Destitute North Korea on Thursday threatened to end all relations with South Korea, a major source of aid and cash, in anger at the hard-line policies of its conservative president.

It comes days after North Korea pledged to resume taking apart a nuclear plant that makes bomb-grade plutonium and return to a disarmament deal after the United States took the North off its terrorism blacklist and removed some trade sanctions.

"If the group of traitors keeps to the road of reckless confrontation with the DPRK (North Korea), defaming its dignity despite its repeated warnings, this will compel it to make a crucial decision including the total freeze of the North-South relations," the North's communist party newspaper said in a commentary, referring to South Korean President Lee Myung-bak.


The state media regularly hurls insults at Lee but this latest commentary was similar in form to a warning issued in April that was followed by the North cutting off direct dialogue and expelling South Korean officials from a joint factory park just north of the border.

The compromise in a nuclear deal it has with China, Japan, Russia, South Korea and the United States, give the ostracised North more chance to tap into international finance and trade.

North Korea pledged to allow in international inspectors to check claims it made about its nuclear programme after the United States removes it from a terrorism blacklist.

North Korea's improved standing in the outside world could help it raise its crippled industrial base and possibly make it easier for overseas investors to tap into its mineral wealth.

"The North is saying that should the South not change its policy to a more favourable one, it could isolate it in the nuclear talks and try to get closer with the United States," said Koh Yu-hwan, a Dongguk University professor of North Korea studies.