South Korea calls for pullout from joint industrial zone

SEOUL (AFP) - South Korea called on Friday for the withdrawal of all remaining workers from its joint industrial complex with North Korea, after Pyongyang shunned an offer for talks on the zone's future.

"The government has made the inevitable decision to withdraw all the remaining people for their protection," the South's Unification Minister Ryoo Kihl Jae told reporters.

"North Korea must guarantee the safe return of our personnel and fully protect the assets of the companies with investment in Kaesong," he added.

It was not immediately clear how the withdrawal would be implemented, after an association representing South Korean firms at the complex earlier indicated their determination to remain and defend their investments.

"We've decided to protect Kaesong Industrial Complex no matter what difficulties we may face," a spokesman for the companies, Mr Ok Sung Seok, told journalists before Seoul's call for workers to leave.

South Korea on Thursday had given the North 24 hours to agree to formal negotiations on the future of Kaesong, warning of "significant measures" if Pyongyang declined.

But the North on Friday rejected what it described as Seoul's "fraudulent" proposal, insisting that any decisive move on Kaesong would come from its side, and warning that the factory park was "on the verge of collapse".

Established in 2004, Kaesong lies 10 km inside North Korea and houses 123 South Korean firms.

The last remaining example of inter-Korean cooperation, it is a crucial hard currency source for the impoverished North, through taxes and revenues and from its cut of worker wages.

The Korean peninsula was already engulfed in a cycle of escalating tensions - triggered by the North's nuclear test in February - when Pyongyang decided on April 3 to block all South Korean access to Kaesong.

Pyongyang pulled out its entire workforce six days later and suspended operations, angered by the South's mention of a "military" contingency plan to protect its staff at the site.