Confrontation over nuclear plant brings back nightmare of conflict in Korea

North Korea has accelerated its campaign to intimidate the outside world – and particularly Washington – by brandishing its ability to make weapons of mass destruction.

The isolated Stalinist state has begun removing UN monitoring equipment – including safety seals and surveillance cameras – from a mothballed Soviet-era atomic reactor which it plans to fire up.

US intelligence and UN inspectors believe that the 5 megawatt research reactor was previously used to make weapons-grade plutonium, and could do so again.

The announcement marked an escalation in North Korea's dispute with the US which began in October when Pyongyang admitted it had a secret uranium-enrichment programme, in defiance of a 1994 agreement.

In response, the US, South Korea, Japan and the EU halted free supplies of heavy fuel oil – a reward for signing the 1994 deal, known as the framework agreement.

North Korea needs the oil during its harsh winter to generate electricity; its loss prompted North Korea – already angry at being branded a member of George Bush's "axis of evil" – to threaten to restart its nuclear programme.

The nuclear reactor in question is located on an arid plain at Yongbyong, 60 miles north of Pyongyang. Although completed in 1987, it is part of a complex that dates back to the mid-1960s. Several thousand researchers were believed to work in the area.

US intelligence estimates that the reactor is capable of producing enough uranium to make 7kg of plutonium a year, enough for one or two nuclear bombs. It was shut down in 1994 and 8,000 fuel rods were removed. The US and UN believe these could be reprocessed into enough plutonium for up to five weapons. They were eventually encased after intensive negotiations with the US, which has been pressing to have them moved out of North Korea.

The International Atomic Energy Agency has been monitoring North Korea's nuclear installations, albeit incompletely, since the 1994 framework agreement. The seals were among the measures used by the IAEA inspectors to monitor the reactor after its shutdown, and are supposed to ensure that no one enters sensitive areas or uses equipment.

Inspectors were scrutinising CCTV footage daily from the cameras installed at the site, but these cameras, and other surveillance devices, have now been disabled.

The IAEA's director-general, Mohammed al-Baradei, has written a letter of protest to the North Koreans, saying that their "unilateral" actions have "prevented an orderly transition from IAEA monitoring of the freeze of the reactor to a situation where we would be monitoring the facility during its operation". He has asked North Korea to allow his inspectors "to apply the necessary containment and surveillance measures ... and not operate the reactor before the necessary safeguards measures are in place".

Pyongyang justified its actions by accusing the US of breaking its promise to supply 500,000 tons of fuel oil annually as compensation for the loss of electricity caused by the freezing its nuclear plants.

Its KCNA news agency said North Korea began removing the surveillance devices after the IAEA ignored earlier demands to take the equipment away to allow the reactor to restart: "This situation compelled [North Korea] to immediately start the work of removing the seals and monitoring cameras from the frozen nuclear facilities for their normal operation to produce electricity."

South Korea – fresh from a presidential election won by Roh Moo Hyun, a human rights lawyer keen to maintain the policy of engagement with the North – was alarmed. It demanded that North Korea immediately restore the equipment. Japan called the decision to remove the surveillance equipment "extremely regrettable" and urged North Korea not to restart its nuclear programme.

Underneath this lurks the fear that the Korean peninsula could be heading back to the nightmare of the early 1990s, when the Pentagon drew up plans for a strike on Yongbyong and moved troops closer to the border, and North Korea was talking about engulfing the South in a "river of fire". War was averted by the 1994 framework agreement – a deal that now seems to be in tatters.