SEOUL: North Korea has stripped South Korean company Hyundai of its right to run cross-border tours in an apparent bid by the communist state to press Seoul to soften its stance towards Pyongyang.
The Korea Asia-Pacific Peace Committee said in a statement there would be no more tours run by Hyundai Asan to the scenic Mount Kumgang in the North, where the firm has invested millions of dollars.
"There is no more prospect of resuming the tour of Mt. Kumgang," the statement said, adding it would now enter a deal with an unspecified "overseas businessman" to replace Hyundai Asan.
"A state measure will be taken soon to renew the tour of Mt. Kumgang," it said without elaborating.
Spokeswoman Lee Jong-Joo of the South Korean unification ministry said the North's unilateral announcement was unacceptable.
"North Korea must immediately withdraw this measure, which is clearly in breach of international laws and practices," she told AFP on Saturday.
Hyundai Asan, part of shipping and logistics giant the Hyundai group, and North Korea signed a contract to grant the company a 50-year monopoly over the cross-border tours to the resort.
The company said the contract could not be scrapped unilaterally by the North.
"All agreements reached with the North concerning the tour must be respected as they cannot be nullified unilaterally by one side," it said in a statement.
"We will closely consult with the (South Korean) government and make utmost efforts to resume the tour," it said.
Professor Yang Moo-Jin of the University of North Korean Studies said the North was using the project as leverage to force Seoul to soften its stance toward Pyongyang.
The tours to Mount Kumgang by South Koreans, which began in 1998, once earned the impoverished and isolated North millions of dollars in hard currency each year.
But the South suspended the programme in July 2008 after a North Korean soldier shot dead a Seoul housewife who had strayed into a restricted military zone. In retaliation, the North seized or sealed off Seoul-owned buildings there.
The South has said it will not resume the tours until the North allows an on-site investigation into the shooting and gives firm safety guarantees.
Cross-border relations have been icy since the South accused the North of torpedoing a warship in March 2010 with the loss of 46 lives.
Pyongyang denies the charge but went on to shell a South Korean island last November, killing four people.
North Korea in May last year attempted to open the Seoul-invested Mount Kumgang to Chinese tourists but South Korea called on China to keep its tourists away from the resort, a request accepted by Beijing, Yonhap news agency said.
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