SEOUL - NORTH Korea on Wednesday began a high-level inspection of a Seoul-funded joint industrial estate, two weeks after ordering hundreds of South Koreans to quit the complex, officials here said.

The South's unification ministry said it was too soon to assess the motives for the visit to the Kaesong estate, just north of the heavily fortified frontier, which was developed as a symbol of reconciliation.

It comes 17 days after the communist state imposed strict border controls and ordered staff out of Kaesong in protest at what it termed Seoul's confrontational policies.

Lieutenant-General Kim Yong Chol, top policymaker of the North's powerful National Defence Commission, and four other military officers met representatives of South Korean firms for 55 minutes, said the ministry which handles cross-border relations.

Lieutenant-General Kim 'said they were making the tour to inspect the implementation of the December 1 measures', said ministry spokesman Kim Ho Nyoun.

'Another purpose of the visit is to brief South Korean company executives on the purposes of the December 1 measures,' he said.

The border curbs followed months of worsening relations between the two governments, which have remained technically at war since their 1950-53 conflict.

'It is too early to say whether the visit by a national defence commission delegation is positive or negative,' spokesman Kim said, adding that the group will stay there until Thursday.

North Korea has indicated it does not want to shut down the estate, which earns it millions of dollars a year. The number of North Korean workers at the 88 South Korean firms has increased this month to more than 37,000.

Factory owners complain that while the border curbs are not hampering daily operations, they are losing orders because of the overall uncertainty.

Kaesong was seen as a new business model, with the North providing the cheap labour which the South lacks and Seoul supplying the investment and know-how.

The workers earn about US$70 a month producing items such as watches, clothes, shoes and kitchenware. Employers are required to pay wages direct to the North's authorities, who return a portion to the workers.

Conservative South Korean President Lee Myung Bak, breaking with the 'sunshine' engagement policy of his predecessors, has linked major economic aid to progress in the North's denuclearisation - a stance which enrages Pyongyang.

The North has also accused Mr Lee's government of condoning anti-Pyongyang leaflets which have been spread across the border by Seoul activists. -- AFP