Tokyo has expressed "extreme regret" at North Korea, after DNA tests showed that remains provided by the North were not those of a missing Japanese woman.
Megumi Yokota's parents believe she is still alive
Pyongyang has admitted kidnapping
Megumi Yokota in 1977, saying she committed suicide in 1994.
But Japan remained sceptical, and had called for proof that she was dead.
Japanese Cabinet Secretary Hiroyuki Hosoda said the issue was now a "major obstacle" to ties, and said food aid to the North should be re-evaluated.
The remains were brought back by a Japanese delegation last month after a fact-finding mission about kidnap victims who have gone missing in the North.
Pyongyang admitted in 2002 to abducting 13 Japanese nationals, who were to be used as cultural trainers for North Korean spies. Five were allowed to return to Japan, while North Korea said the others had died.
The DNA test results were made public on Wednesday.
Snatched in the '70s and '80s
Used as cultural trainers for N Korean spies
Five allowed home in 2002
Five children now freed from N Korea
Eight said to be dead, others missing
"The bones belonged to a number of other people," Mr Hosoda said.
"It would be difficult under such circumstances to provide further assistance to North Korea," he said.
Japan's Foreign Ministry said later that its embassy in China filed a
formal protest to North Korean officials in Beijing.
Megumi Yokota's mother, Sakie, said the results showed North Korea was not telling the truth.
"It's good that the results let everyone in this country know how Kim Jong-il's country is cruel, cold-blooded and inhumane," she said.
Tsutomu Takebe, secretary general of the ruling Liberal Democratic Party, called North Korea's latest move "extremely insincere".
The latest twist will fuel suspicions that Megumi Yokota is still alive and being held in the North.
Some believe she is being detained because she knows too much about the secretive country.
The confusion is also likely to be a major hindrance to Japan's normalising relations with North Korea, which is keen for economic aid.
North Korea has handed over remains before which did not match the supposed deceased.
In 2002, Japanese investigators were handed human remains which North Korea said belonged to Kaoru Matsuki, who supposedly died in a traffic accident in 1996.
But a jaw fragment studied by a dental professor in fact resembled that of a woman in her 60s.