Relations between the two Koreas deteriorated further today when the government of the North announced that it would close a land border with the South out of anger at the air-dropping of leaflets denouncing the totalitarian regime by human rights organisations.

The complete closure of the crossing across the intensely fortified “demilitarized zone” (DMZ) would be a blow for one of the symbols of co-operation between the divided states, the joint industrial zone in the town of Kaesong, just inside North Korea. It is a further sign of the chill that has overtaken inter-Korean relations since the inauguration of the conservative Lee Myung Bak as South Korea's president at the beginning of this year.

A report on the North's state-controlled Korean Central News Agency, which announce the closure of the crossing from 1 December, said: “The south Korean puppet authorities should never forget that the present inter-Korean relations are at the crucial crossroads of existence and total severance.”

A spokesman for South Korea's Unification Ministry, Kim Ho Nyoun, said: “We find it regrettable that the North has decided to take those measures. If the North carries them out, it would have a negative impact on what has been achieved in inter-Korean relations.”

The official reason for the decision was South Korea's failure to honour an agreement from 2004 to desist from propaganda efforts across the DMZ. At the time, both sides removed giant billboards and loudspeakers that broadcast mutually hostile rhetoric. But recently South Koreas civic groups have taken to sending large hot-air balloons into the skies above the North laden with anti-Pyongyang leaflets. The state media threatened to reduce the South to “debris” if these “confrontational activities” were not stopped.

“Such stand and attitude are leading to the grave, wanton violation of all the north-south agreements,” the Korean Central News Agency said.

Some 1,600 employees of South Korea's Hyundai Corporation work in the Kaesong complex, a product of the opening up of relations between the two enemies after a summit meeting of their leaders in 2000. The South Koreans employ 32,000 North Koreans in simple manufacturing jobs for 60 dollars a month, money which is paid to them indirectly through the Pyongyang government, which is assumed to skim off a good deal of the money. The project represents a significant source of income for the North, and the fact that is appears prepared to sever this income is an indication of its anger.

President Lee's two predecessors sought to engage with the North Korean leader, Kim Jong Il, but the current president has adopted a much more detached policy, promising long-term economic aid only after Pyongyang has completely abandoned its nuclear weapons programme. North Korean indignation at such a suggestion has taken the form of personal invective against Mr Lee which is virulent even by its standards.

The atmosphere became still worse in July when a middle-aged South Korean woman who was visiting another joint project, a tourist resort in the east of the country, was shot dead by North Korean soldiers after apparently wandering into a restricted zone. The Mount Kumgang resort, another Hyundai enterprise, was suspended soon after.

To add to all this, South Korean analysts believe that Mr Kim, 67, has suffered at least one stroke in August which put him out of action for almost three months.

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