Pyongyang to take resort from South

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North Korea said yesterday it would confiscate five South Korean-owned properties at a jointly operated mountain resort in the isolated communist country, a development likely to worsen already-soured relations.

North Korea has been demanding that the South resume tours to the facility, which had been a key source of foreign currency earnings for the impoverished nation. They were suspended after a North Korean soldier killed a South Korean tourist in 2008.

South Korea has refused to restart tours until its demands for a joint investigation into the shooting are carried out and measures to guarantee the safety of tourists are outlined.

Tensions between the two Koreas are already high after a South Korean navy ship sank last month, killing at least 39 people and leaving seven missing, amid suspicion that North Korea may have been responsible. North Korea has denied involvement.

"The confiscated real estate will be put into the possession of the (North) or handed over to new businessmen according to legal procedures," North Korea said in a statement carried by the official Korean Central News Agency on Friday.

The five seized properties were identified as a fire station, a duty-free shop, a reunion centre for families separated by the 1950-53 Korean War, a cultural centre where North Korean troupes performed for tourists and a spa.

The North also said it would freeze ownership of all the remaining South Korean real estate at the resort on the country's east coast and expel all their management personnel. Pyongyang warned that it would "take more rigid follow-up measures" if South Korea challenged what the North calls "legitimate steps". It did not elaborate.