North Korea on Wednesday cancelled an invitation to UN chief Ban Ki-moon to visit an industrial zone inside the isolated state, in an abrupt move that Ban deplored as "deeply regrettable".

The decision comes after Ban this week urged North Korea to avoid any actions that might escalate military tensions, after it successfully test-fired a submarine-launched ballistic missile (SLBM).

Ban said that via "diplomatic channels", North Korea had rescinded its invitation to the Kaesong zone, which is a key earner for the cash-strapped state but a perennial source of tension with South Korea.

"No explanation was given for this last-minute change," the UN chief, a former foreign minister of South Korea, told a forum in Seoul.

"This decision by Pyongyang is deeply regrettable," Ban said.

"However, I as the secretary-general of the United Nations, will not spare any efforts to encourage the DPRK (North Korea) to work with the international community for peace and stability on the Korean peninsula and beyond."

Ban had planned to travel Thursday to the industrial estate, a joint enterprise between Pyongyang and Seoul which lies 10 kilometres (six miles) over the border inside North Korea.

It hosts around 120 South Korean firms employing some 53,000 North Korean workers.

Had the visit gone ahead, Ban would have become the first UN secretary-general to set foot in the communist state for more than 20 years, since Boutros Boutros-Ghali in 1993.

Unlike Boutros-Ghali, who met the North's then-leader Kim Il-Sung to discuss tensions over its  nuclear ambitions, Ban was not expected to have any high-level talks during his brief visit to Kaesong.

- Wages and weaponry in spotlight -

Born out of a "sunshine" reconciliation policy initiated in the late 1990s by South Korea's then president, Kaesong was established in 2004 as a rare symbol of inter-Korean cooperation.

Ban, who has been visiting South Korea this week, said Tuesday that the Kaesong project was a "win-win model for both Koreas".

Ban went to Kaesong with a delegation of foreign diplomats in 2006 when he was South Korea's foreign minister.

The cancellation comes at a time when the two Koreas are again mired in a dispute over wages at Kaesong, with Pyongyang insisting on unilaterally imposing a pay rise for its workers.

Seoul insists that any wage change must be a joint decision.

Impoverished North Korea keeps the hard-currency wages and passes on a small fraction -- in local currency -- to its workers.

Aside from the Kaesong dispute, tensions have again intensified after North Korea's test of the SLBM, which was in defiance of a UN ban on the country testing ballistic missile technology.

A fully developed SLBM capability would take the North Korean nuclear threat to a new level, allowing deployment far beyond the peninsula and the potential to retaliate in the event of a nuclear attack.

"If the DPRK's activities continue, we could see more arms competition and rising tension throughout this region," Ban said in Seoul on Tuesday.

"I encourage the DPRK to take steps necessary to prevent escalation and to enable a return to multilateral negotiations and engagement, including by complying with all relevant Security Council resolutions."
Source: AFP