North and South Korea have scrapped high-level talks planned for this week, over a disagreement on who should lead the delegations.
The South reportedly wanted each country's top official for inter-Korean affairs to meet, but the North would not commit to that.
A spokesman for Seoul's Unification Ministry told reporters today that North Korea said it wasn't sending its officials because of the disagreement.
Aimed at improving co-operation after a tense few months, which culminated in threats of nuclear war from the North, the talks had seemed like a major diplomatic breakthrough.
The two-day meeting, announced only yesterday and due to start tomorrow, was planned to focus on stalled joint projects, such as a factory on the border that was the last remaining vestige of inter-Korean rapprochement until Pyongyang pulled out its workers in April.
The 17 hours of negotiations in the village of Panmunjom on the heavily armed border, which led to the planned talks, now seem to have been in vain.
The last few years have seen North Korean nuclear tests, long-range rocket launches and attacks blamed on the North that killed 50 South Koreans in 2010. Earlier this year the North Korean leader Kim Jong-un threatened nuclear war, and was greeted by a pledge of retaliation from the South.
Yesterday Seoul's Unification Ministry had noted that while there was broad agreement ahead of the talks, sticking points arose over the delegation heads and the agenda - a point with added significance now. Seoul said it would send a senior-level official responsible for North Korea-related issues while Pyongyang had said it would send a senior-level government official, without elaborating.
South Korea's Unification Minister Ryoo Kihl-jae proposed a minister-level meeting with the North last week, something which has not happened since 2007.
The armistice which ended the 1950-53 Korean War has never been replaced with a peace treaty, leaving the neighbours technically at war.
Pyongyang is trying to improve ties with Seoul because it very much wants dialogue with the United States, which could give the North aid, ease international sanctions and improve its economy in return for concessions, said Kim Yong-hyun, a professor of North Korea studies at Dongguk University in Seoul.
The summit had seemed a political and diplomatic victory for South Korean President Park Geun-hye, who took office in February and has maintained through the heightened tensions a policy that combines vows of strong counter-action to any North Korea provocation with efforts to build trust and re-establish dialogue.Reuse content