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Last Updated: Tuesday, 10 April 2007, 17:46 GMT 18:46 UK
Macau unblocks North Korean funds
Christopher Hill, US chief negotiator, in Seoul
Mr Hill is in Seoul, en route to China, after a stop in Tokyo
Macau has unblocked funds that have been a stumbling block to a deal on North Korea's nuclear programme, Macanese and US officials have said.

"Authorised account-holders" can now withdraw funds from the North Korean accounts that had been frozen, a US state department spokesman said.

Pyongyang had refused to move forward with the deal until the Macau banking authorities released the money.

In February, the North agreed to close its main nuclear reactor by Saturday.

The Monetary Authority of Macau (MAM) said the funds were available with "immediate effect," MAM spokeswoman Wendy Au was quoted as saying by Japan's Kyodo news agency.

"The account holders or authorised parties can go to the bank and withdraw or deal with their deposits," she added.

In Washington, US State Department spokesman Sean McCormack said:

"The bottom line is that they have unblocked these accounts and the account holders can - authorised account holders can - withdraw the funds from these accounts.

"The focus can return to the core subject of the six-party talks, and that is the denuclearisation of the Korean peninsula."

Progress frozen

Under a landmark 13 February agreement, North Korea agreed to "shut down and seal" its Yongbyon nuclear plant within 60 days, in return for energy aid and other incentives from its dialogue partners - the US, China, Russia, South Korea and Japan.

Satellite view of North Korean nuclear reactor at Yongbyon - file photo 2002
North Korea has pledged to shut down its main reactor at Yongbyon

Progress on implementing the deal was delayed because of the financial dispute involving $25m (12.7m) of North Korean funds which had been frozen in Banco Delta Asia.

Pyongyang refused to advance with the nuclear deal until it received the money.

North Korea's top nuclear envoy, Kim Kye Gwan, said that his government would allow UN nuclear inspectors into the country - to check whether it is meeting its commitments - as soon as the funds were released.

Analysts had become pessimistic that the deadline would be met because of the financial row.

Diplomacy went into high gear with Mr Hill stopping in Japan on his way to South Korea and China for discussions on North Korea.

South Korea and China agreed to co-operate more closely to end the North's nuclear programme in talks in Seoul between South Korean President Roh Moo-hyun and Chinese Premier Wen Jiabao.

Another US team - which is officially in North Korea to secure the remains of US troops killed in the Korean War - also held negotiations on the nuclear issue.

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