S Koreans leave complex in North

South Korea says the North's actions will impede production at Kaesong

Hundreds of South Koreans have left a flagship industrial complex in North Korea, amid deteriorating relations on the Korean peninsula.

They left after fresh restrictions were ordered by Pyongyang, angered by a hardened stance from the South.

Meanwhile in South Korea, there were scuffles as activists attempted to release more balloons containing anti-North propaganda across the border.

Seoul has called for talks but the North has blamed Southern provocation.

Crowning achievement

The South's Ministry of Unification said about 430 workers had left the Kaesong plant on Tuesday, with another 70 due to leave on Wednesday.

The North says it will now permit only 880 South Korean managers and officials to continue to travel to the site - a number the South says is too small to enable operations to continue.

We propose to the North that [we] open talks at any time, any place and at any level South Korean Unification Minister Kim Ha-Joong Glimpse of N Korea disappears

When it opened, the Kaesong enclave was seen as the crowning achievement of about a decade of warming North-South ties under the South's "sunshine" policy of engagement.

About 35,000 North Korea labourers worked in the plant, producing clothes, kitchenware and other items for dozens of South Korean firms. It earned Pyongyang millions of dollars of badly needed foreign currency every year.

But since the election in South Korea of President Lee Myung-bak nearly a year ago, relations have nosedived.

President Lee says he is reviewing a raft of cross-border projects agreed in historic summits in 2000 and 2007, and has linked aid to progress on the issue of North Korea's nuclear disarmament.

But the South has repeatedly urged the North to rejoin talks.

"We propose to the North that [we] open talks at any time, any place and at any level. We hope the North will respond positively," Unification Minister Kim Ha-Joong said in a speech at a forum on Tuesday, reported AFP news agency.

Hitting and kicking

Scuffles broke out as activists tried to launch more anti-Pyongyang balloons

More recently, the North has also been angered by Seoul's co-sponsorship of a UN motion denouncing the human rights situation in the North, and South Korean activists repeatedly sending thousands of leaflets criticising the Northern regime into the country inside helium balloons.

The South has also attempted to stop the balloon activists, saying their actions are counter-productive, but the campaign has continued.

On Tuesday the balloon activists who congregated close to the North Korean border were prevented from letting off most of 100,000 leaflets by left-wing demonstrators. They scuffled, spitting, hitting and kicking one another, reports said.

Riot police were deployed to break up the confrontation.