North Korean leader Kim Jong Il ordered the investigation, saying the inter-Korea agency lacked supervision and was involved in corruption scandals, the sources said.

The rare move comes as South Korea's President-elect Lee Myung Bak said he would review cooperation projects with the North and make it harder for the communist neighbour to receive aid by linking handouts to progress on its nuclear disarmament.

The investigation, launched in September, has so far found officials working on inter-Korea projects received bribes and were responsible for selling some aid from South Korea on the black market, according to Yonhap.

The North's Kim said that 'those who took even one gram of South Korean flour should throw up', one source was quoted as saying.

North Korea, which suffers from chronic food shortages, usually relies on handouts from South Korea and China, as well as international agencies. -- REUTERS