World News Story

08 January 2009 18:34 BST

North Korea to shut down reactor after receiving frozen funds

North Korea has promised to shut down its nuclear reactor in Yongbyon after it confirmed the receipt of £12.5 million in frozen funds.

The reclusive communist regime has remained adamant it would only shut down its nuclear programme after the successful transfer of the previously frozen funds held by a bank in Macau.

The North Korean foreign ministry said in a statement: "The issue of the frozen funds has finally been settled."

It added that "action for action" would now be taken and that discussions on inspections and shutting down nuclear facilities would now be held with an International Atomic Energy Agency (IAEA) team on June 26th in Pyongyang.

The transfer of the funds paves the way for the implementation of a deal struck in February under which trade sanctions will be lifted and fuel aid will be delivered.

The release of the funds was a lengthy process as suspicions that they had been procured through drug smuggling and counterfeiting activities made international banks unwilling to handle them. A Russian intermediary was needed to secure the transfer of the funds.

A team from the International Atomic Energy Agency (IAEA) has arrived in Beijing and will now proceed to Pyongyang for a five-day visit to discuss the disarmament of North Korea's nuclear programme.

Olli Heinonen, who heads the team, said one of the most important items on the agenda would be how to verify the closure of the Yongbyon reactor.

"Now we are going to negotiate how to verify and make sure the reactor will be shut down and sealed, so this is the next step on this long trip," he said.

The present trip will be the first time the IAEA has visited the country since inspectors were forced to leave in 2002.