COMPELLING new evidence of North Korea’s involvement in the illegal drug trade has convinced many American officials that the regime will use its underworld connections to sell nuclear materials to the highest bidder.

The threat has become real since a North Korean negotiator told the Americans last week that Pyongyang had nuclear weapons and the will to use or trade them.

The declaration put North Korea’s dictator, Kim Jong-il, back on a course of confrontation with Washington and prompted President George W Bush to accuse the regime of its “old blackmail”. The White House also said it would confer with allies about possibly seeking United Nations sanctions against Pyongyang.

Kim’s latest brinkmanship came as Australian police charged 30 North Koreans with heroin smuggling after a five-day chase that ended last Sunday with the capture of their ship by the Royal Australian Navy.

A court in Sydney denied bail to the alleged smugglers, who were arrested on board the Pong Su, a vessel owned by a North Korean trading company but registered in the former British colony of Tuvalu, a remote Pacific island. The Australians seized heroin worth £32m.

While the investigation yielded a dramatic success, its outcome proved to western officials that North Korea maintains links with some of the world’s most unscrupulous crime syndicates.

“The great fear is that if the North Koreans find a customer for fissile materials, they will not hesitate to sell,” said a western diplomat in China who follows North Korean affairs.

Prosecutors in Taiwan are also seeking the death penalty for six members of a Taiwanese smuggling gang who loaded £4m of heroin on board their fishing boat, the Shun Chi Fa, from a North Korean navy vessel last June.

Defectors claim Kim Il-sung, founder of the North Korean regime and the present ruler’s father, ordered the cultivation of opium in 1992 and set aside state-run pharmaceutical plants to process it into heroin. The Kim family dictatorship has continued to raise revenue from drug sales and counterfeit currency as the country’s economy collapsed in the 1990s.

The regime has even used foreign aid donations of fertiliser to boost the opium crop, according to a recent report published in South Korea.

The European Union gave 123,785 tons of fertiliser to North Korea last year, while the South Koreans donated 300,000 tons. Last week the North Korean Red Cross asked its southern counterparts for more fertiliser this year.

It is the proven track record of criminal narcotics sales, plus the dictatorship’s history of unpredictable moves, that now has American military officials in South Korea and Washington deeply concerned.

Last week the North Koreans raised the stakes in their standoff with the Americans. Talks in Beijing between North Korean officials and James Kelly, the US assistant secretary of state — that were intended to reduce tension — broke up without progress after the North Koreans fiercely asserted their right to nuclear weapons. A South Korean cabinet delegation due to travel to Pyongyang today will challenge their communist hosts over their claims.

The latest escalation in tensions seems certain to strengthen the hand of hawks within the Bush administration, who argue Kim cannot be trusted and that the US should push for regime change in North Korea.

Such a policy would cause new dissension between America and its allies. A North Korean delegation left for Britain yesterday, headed by Choi Su-hun, the vice-minister of foreign affairs, with the apparent aim of winning European understanding for the regime’s position. But the margin for diplomacy may be narrowing faster than the North Koreans think.

Officials in Japan and South Korea, the countries most vulnerable to North Korea’s missiles, already fear a western intelligence failure over the regime’s stock of 8,000 nuclear fuel rods at its reactor at Yongbyon, north of Pyongyang.

• A freighter loaded with uranium enrichment equipment destined for North Korea was intercepted in Cairo earlier this month at the request of the German government.

  Berlin confirmed last night that the ship was carrying 22 tons of aluminium tubing manufactured by Optronic, a company based in Stuttgart. The material would have been sufficient to build 400 centrifuges used in the production of weapons-grade uranium. Optronic’s manager was placed under arrest.

  Additonal reporting: Michael Mackay, Seoul

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