North Korea offers South guarantees to reopen Kaesong industrial zone

Impoverished North Korea said it was reopening the troubled Kaesong industrial zone jointly run with the wealthy South just minutes after Seoul signalled its willingness to let it close for good.

The North's Committee for the Peaceful Reunification of Korea, which handles Pyongyang's ties with Seoul, yesterday proposed talks aimed at normalising the project and said the safety of South Koreans visiting the factory park would be guaranteed.

The committee was "prompted by its desire to bring about a new phase of reconciliation, cooperation, peace, reunification and prosperity by normalising operation in the Kaesong zone", it said in unusually conciliatory remarks.

The comments were carried by the North's official KCNA news agency about 90 minutes after South Korea announced steps to pay US$250 million compensation to its firms that operate factories in Kaesong for losses - a step widely seen as a move towards shutting down the rivals' last symbol of co-operation.

The decision to pay 109 South Korean small and medium-sized manufacturers from a government insurance fund came after the North went for 10 days without responding to what Seoul said was its "final offer" for talks aimed at reopening the project.