The communist nation conducted its first two nuclear tests, in October 2006 and May 2009, in Punggye ri, the second coming the month after it walked out of six party regional nuclear disarmament talks."It is obvious evidence that it (the North) is preparing a third nuclear test," said the unnamed official quoted by Yonhap.

Pyongyang is building more than one tunnel to choose the best one for a possible test, as tunnels cannot be reused after a nuclear test blast, the official was quoted as saying. The official added the possible test would probably be carried out using material from the North's plutonium stockpile, which Seoul and Washington estimate to be enough for six to eight bombs.

The nuclear-armed North in November disclosed an apparently operational uranium enrichment plant to visiting US experts, heightening regional security fears.Pyongyang claims the programme is for peaceful energy development. But outside experts have said it could easily be converted to produce weapons-grade uranium, giving the North a potential second way of making atomic bombs.

Security concerns heightened further after recent satellite images showed Pyongyang was taking steps to test a missile that could eventually reach the US.

An image posted on the website of US defence information group GlobalSecurity.org showed a completed missile launch tower at the North's Tongchang ri base on the west coast.US Defence Secretary Robert Gates warned last month that North Korea could have missiles within five years that would directly threaten the United States.