TOKYO (AFP) - A Buddhist temple on Tuesday won an auction for North Korea's de facto embassy in Japan, after it was seized by authorities for unpaid debts, the religious body said.

The Saifukuji temple in south-western Kagoshima topped the bidding with 4.52 billion yen (S$59 million) in the forced auction, one of the temple's secretaries told AFP.

It was not known what plans the temple has for the building, but according to its website, priest Ekan Ikeguchi has visited North Korea several times in the past.

The property - a 2,390-sq-metre plot and a 10-storey building in central Tokyo, according to Jiji Press - has been used as the headquarters of Chongryon, the organisation that represents North Korean interests in Japan in the absence of diplomatic ties.

But Japan's government debt collection body, the Resolution and Collection Corporation (RCC), seized the property and began the auction in lieu of what the body owed, partially as the result of the state bailout of a failed bank.

The RCC had demanded repayment of 62.7 billion yen from the Korean organisation and sought to impound property as collateral.

The headquarters had been registered under a different name, but the Supreme Court ruled last year that the building is in practice controlled by Chongryon and should be considered as its property.

The top court then authorised the seizure of the Chongryon headquarters to pay off debts.

The sale is expected to be finalised on Friday once the Tokyo District Court gives the green light to the temple's purchase, Jiji said.

Hundreds of thousands of ethnic Koreans live in Japan, mostly a legacy of those who emigrated or were forced to move to Japan during its 1910-1945 colonial rule of the Korean peninsula.

About 10 per cent are believed to be affiliated with Chongryon, which charges that the community is persecuted by authorities and harassed by right-wing activists.

The Tokyo metropolitan government, headed by then nationalist governor Shintaro Ishihara, in 2003 suspended a tax break which Chongryon enjoyed due to the buildings's quasi-diplomatic status.