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Last Updated: Tuesday, 20 March 2007, 13:44 GMT
N Korea boycotts talks session
Japanese negotiator Kenichiro Sasae talks to reporters on 20 March 2007
Kenichiro Sasae says the North wants to see its money
Six-party talks aimed at ending North Korea's nuclear programme hit a snag after Pyongyang's negotiators refused to attend a meeting of chief delegates.

Japanese envoy Kenichiro Sasae said the North had refused to participate until it was able to access $25m of its money that was frozen in a Macau bank.

The US announced on Monday that the North Korean money would be transferred from Macau to a bank in China.

Unblocking its assets was a key demand for the North in a recent nuclear deal.

The agreement, reached on 13 February, calls for the North's main nuclear reactor, Yongbyon, to be "shut down and sealed" in return for fuel aid.

The six nations involved in the deal - the two Koreas, China, the US, Russia and Japan - are meeting in Beijing to discuss progress towards a 60-day deadline for Pyongyang to shut down Yongbyon.

US inquiry

Earlier on Tuesday, China reported "good progress", saying the North indicated it was ready to shut down its nuclear reactor and allow UN inspectors back.

But the host country was forced to cancel an afternoon meeting of the six top envoys after North Korea refused to attend.

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Mr Sasae said it appeared the North delegates were staying away until the promised transfer of the country's $25m had been made.

"According to China, North Korea said they will not come to join further discussions until they confirm that their money got into their bank account in China," he said.

But envoys from other countries played down the issue, insisting the money problem would be worked out soon.

"Tomorrow, we anticipate there will be main six-way talks in the morning," South Korea's deputy chief envoy, Lim Sung-nam, said.

North Korea's assets were frozen in September 2005 after the US blacklisted Macau-based Banco Delta Asia (BDA), accusing it of acting as a conduit for money earned by Pyongyang from counterfeit currency and drug smuggling.

After the US ended its inquiry into the bank last week, US Deputy Assistant Treasury Secretary Daniel Glaser said the money in North Korea's accounts would be transferred from the BDA to a Bank of China account in Beijing for Pyongyang to access.

Abduction issue

Meanwhile, another issue that has threatened to overshadow the talks is tension between North Korea and Japan.

On Tuesday, the North's official KCNA news agency accused Tokyo of seeking to sabotage the talks by repeatedly bringing up the topic of Japanese abductees - an issue which Japan insists is its first priority in building relations with Pyongyang.

A day earlier, the North's main nuclear envoy even questioned Japan's qualifications to remain a member of the six-nation talks.

The two sides held face-to-face talks in Hanoi recently as part of a series of bilateral meetings, agreed under the 13 February deal, to help the North set up formal relations with the other five nations.

But the Japanese-North Korean talks were cut short as neither side showed a willingness to give ground.

"Frankly, I felt that there could have been more done in the Japan-DPRK working group, and I really feel that the DPRK... ought to be looking to build a relationship with Japan," US negotiator Christopher Hill told reporters.

But the North hit back, blaming the breakdown of bilateral talks on "the right-wing forces of Japan who do not want the denuclearisation of the Korean peninsula and the normalisation of the bilateral relations."

Tokyo believes the North is not being honest about the fate of its citizens who were abducted in the 1970s and 1980s to train North Korean spies.

The North has admitted abducting 13 Japanese citizens, and has returned five of them, but insists the others are dead - a claim Japan refuses to accept.

Tokyo says it will not contribute energy assistance to the North - provided for under last month's six-party deal - until the issue is resolved.

But in Tuesday's statement, the North said this was an empty threat.

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