The United States and its key allies agreed Wednesday to suspend construction of two nuclear power plants in North Korea, saying that the energy-starved North Korea won't get them unless it gives up its nuclear weapons program.

The move seems likely to kill the $4.6 billion power plants project, because the Bush administration opposes it and officials from the United States, South Korea, Japan and the European Union have agreed that a unanimous decision would be needed to resume construction.

Officials of the Korean Peninsula Energy Development Organization (KEDO) mix concrete in a large bucket for the first concrete pouring in a Light Water Reactor project at Kumho in North Korea's northeastern coastal area in this Aug. 7, 2002 file photo.  [AP/File]

The Korean Peninsula Energy Development Organization, a U.S. based consortium, has been building two light-water reactors as part of the 1994 accord between Washington and Pyongyang in which North Korea promised to freeze and eventually dismantle its suspected nuclear weapons development.

But the deal went sour in October 2002 when U.S. officials said North Korea admitted to running such a weapons program.

The deal had been part of U.S.-led international efforts to persuade Norht Korea to abandon its nuclear weapons ambitions in return for energy aid and other economic benefits. But the Bush administration says the project has lost its tactical merit because Pyongyang has been running a secret nuclear weapons program flouting the agreement.

The four-member executive board of the KEDO met in New York on Monday and Tuesday and discussed suspending the project. The board said it would make its final announcement before Nov. 21 after consulting with the member nations' governments.

Halting the project looked inevitable Wednesday, as all four board members favored pulling out hundreds of workers, many of them South Koreans, who have been digging and pouring concrete to build the reactors in North Korea.

Washington says it sees "no future" for the project.

U.S. officials have been increasingly unhappy with the project, saying they cannot provide North Korea with a cheap and steady source of energy unless it dismantles its nuclear weapons program.

Other KEDO members, notably South Korea, had wanted to keep it alive, fearing that any suspension might further provoke North Korea in its yearlong confrontation over the nuclear issue. Last week, North Korea agreed in principle to return to multinational talks aimed at ending the crisis.

During the New York meeting, the United States and other KEDO members settled for a compromise: an agreement to "suspend" the project for one year, according to South Korean officials.

"The U.S. made clear its long-standing position that there is no future for the reactor project," the U.S. State Department said. But Washington "also indicated that we could agree to a one-year suspension, after which resumption of the project would require unanimous executive board decision."

South Korea, which has borne 70 per cent of the construction costs, insisted the project should not be shelved completely. It wants to use the prospect of reviving the project to persuade Pyongyang to abandon its nuclear weapons ambitions.

The construction project is the biggest in North Korea. The reactors are for power-generation, and it's extremely difficult to use them for weapons purposes.

"Our government's position is suspending the project for one year on the premise of resuming it," South Korean Foreign Minister Yoon Young-kwan. "Resuming the project will be decided then, considering situations surrounding the North Korean nuclear issue."

Japanese Foreign Ministry spokesman Hatsuhisa Takashima indicated Tokyo also supports a suspension, adding that such an move would not hamper efforts to resume six-nation talks on Pyongyang's nuclear arms program, according to the Kyodo news agency.

"In light of the current situation, I doubt a continuation of the project would be effective," Takashima was quoted as saying.

The European Union, which provides $22.9 million a year, is "leaning toward" a one-year suspension to keep open a dialogue with North Korea, an EU official said Wednesday on condition of anonymity.

The Bush administration and its allies had already cut off 147 million gallons of annual free oil shipments — also part of the 1994 deal. Pyongyang retaliated by expelling monitors from the International Atomic Energy Agency, a U.N. nuclear watchdog. Last month, it said it was building more atomic bombs besides one or two bombs it already is believed to possess.

Representatives of the United States, the two Koreas, China, Japan and Russia met in August in Beijing to discuss ending the nuclear crisis. But the meeting ended without agreement on a next round.

Despite the U.S. doubts, South Korea has kept 605 South Koreans, 353 Uzbeks and 99 North Koreans working to build the two reactors in the North. South Korea has already poured too much money — $850 million as of May this year — into the project to ditch it without triggering an uproar at home. Japan has paid at least $393 million so far.

Also Wednesday, South Korea said new U.S.-made missiles would be deployed next month near its border with the North. With a range of 190 miles, the Army Tactical Missile System Block 1A missiles can hit targets across most of North Korea, including its main nuclear complex in Yongbyon, 60 miles north of Pyongyang.

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