SEOUL (AFP) - South Korea said on Thursday that it would pay more than 70 per cent of the 750 million won (S$900,000) costs incurred by rival North Korea when it took part in the recent Asian Games in Incheon.

The issue of subsidising the North's presence at the Sept 19 to Oct 4 Games became problematic ahead of the event, when Seoul proposed breaking with its custom of supporting visiting sports teams from the North.

Pyongyang accused the South of arrogance and retracted its decision to send a cheerleading team to accompany its athletes in Incheon, west of Seoul.

In the end, an understanding was reached that the South would foot part of the bill, though not all of it as in the past.

"Although we apply international norms to an event like the Asian Games, we took into account that the South and North have special relations," said Park Soo Jin, spokesman for the South's Unification Ministry.

Because the 1950-53 Korean conflict ended with a ceasefire rather than a treaty, the two Koreas remain technically at war.

The ministry said that using US dollars, they paid the equivalent of 200 million won to cover the delegation's food and accommodation at the athletes' village.

The Unification Ministry said it would pay the remaining 550 million won, most of which comprised television broadcast and transport costs.

The North's delegation was provided with special transportation during the Games, partly for security reasons.

Park said the money would be taken from the government's fund for inter-Korean exchanges.

In Incheon, North Korea exceeded expectations with 11 gold medals, 11 silver and 14 bronze in its best Asian Games performance since 1990.

The Asiad also saw a surprise visit by three top-ranking North Korean officials to witness the closing ceremony.

Formal talks held during the brief visit resulted in a an agreement to resume a suspended high-level dialogue.