N Korea says talks scotched by sanctions

North Korea says six-nation talks on dismantling its nuclear program have been suspended "for an indefinite period" because of US financial sanctions on the Stalinist state.

In its latest response to comments by a US envoy that Pyongyang is a "criminal regime" engaged in money laundering and counterfeiting, a spokesman for North Korea's foreign ministry said the US was "faking up lies" to disrupt the six-way talks.

"The US is now overturning the basic principles of the joint statement reached at the six-party talks one by one," the spokesman said in an interview with the North's official Korean Central News Agency conducted on Saturday and carried yesterday.

"It scuttled the DPRK [North Korean]-US financial talks, in particular, holding off the six-party talks for an indefinite period," the spokesman said.

A proposed US-North Korean meeting on the financial sanctions did not take place this month, because North Korea wanted to negotiate on the issue while the US simply wanted to hold a briefing.

The six-party talks involving China, the two Koreas, the US, Russia and Japan are aimed at ending North Korea's nuclear weapons programs in exchange for diplomatic and economic benefits and security guarantees.

But a start date for the next session is uncertain amid the latest row.

The US Treasury Department in September told US financial institutions to stop dealing with a Macau bank, Banco Delta Asia, which it accused of being a willing front for North Korean counterfeiting.

A month later the US blacklisted eight North Korean companies allegedly involved in the proliferation of weapons of mass destruction.

North Korea on Tuesday had threatened to boycott the six-way talks unless the US lifts the financial sanctions.

US ambassador to Seoul Alexander Vershbow on Wednesday dismissed the threat, calling Pyongyang as a "criminal regime" engaged in illegal activities.

A spokesman for North Korea's Committee for the Peaceful Reunification of the Fatherland said on Saturday that the remarks by Vershbow amounted to a "declaration of war," further dimming the prospect of talks resuming.