China has urged North Korea not to destabilise the Korean peninsula by testing a nuclear weapon.

The only ally of Kim Jong Il's increasingly paranoid regime advised Pyongyang today to negotiate with the international community rather than "take actions that escalate tensions".

"We hope that North Korea will exercise necessary calm and restraint over the nuclear test issue," said Liu Jianchao, the chief spokesman for the Chinese Foreign Ministry, in a short statement.

Beijing remained conspicuous by its silence yesterday when North Korea said for the first time that it was planning to test a nuclear bomb.

The threat, coming after months of sabre-rattling and a series of conventional missile tests in July, provoked an international outcry, with South Korea, Japan, Russia, France, Britain and Russia all expressing their concern.

The fallout continued today. Condoleezza Rice, the US Secretary of State who is visiting the Middle East, said a test "would be a very provocative act by the North Koreans" while South Korea, officially still at war with the North, warned that the move could lead to an arms race in Asia.

Even as aid lorries carrying cement continued to flow across the border from the South into the impoverished North, which maintains a functioning nuclear programme despite years of famine and isolation from international trade, the South Korean Deputy Foreign Minister, Yu Myung Hwan, warned parliament that the danger from Pyongyang could remake the region.

Mr Yu prophesised that an atomic test "could provide a pretext for Japan’s nuclear armament... This will prompt countermoves by China or Russia and lead to a change in the balance of power in the Northeast Asia".

Australia, one of the few countries in the world to maintain economic and diplomatic relations with North Korea, summoned the country's ambassador in Canberra today to warn him "in the strongest possible terms of the severe consequences" that Pyongyang would face if a test was carried out.

"I am outraged that a country that has to rely on the international community to feed its own people devotes so many of its scarce resources to missile and nuclear weapons programs," said the Australian Foreign Minister, Alexander Downer.

But North Korean diplomats sounded a note of anxiety rather than calm: "Now the situation around the Korean peninsula is very tense, it may be breaking out a war at any time I think," a spokesman for the Embassy in Canberra told Reuters.

Kim Jong Il’s isolated and paranoid regime is highly unpredictable and some will dismiss the latest threats as the rantings of an eccentric dictator.

But since Pyongyang withdrew from peace talks a year ago, the regime does appear to have hardened its stand. In July it test fired a Taepodong-2 missile, which could one day have the range to hit America. The test failed after 40 seconds, but the North Koreans then fired five shorter range ballistic missiles to prove that they could still hit targets in the region.

"Pyongyang has been increasingly controlled by hardliners in the past months and its policies and words have become more and more extreme," said Shi Yinhong, a Chinese foreign policy expert. "The situation is really dangerous."

The North Koreans are particularly frustrated by American financial sanctions. By playing its nuclear card now, Pyongyang may hope to put pressure on America and its neighbours to ease its isolation.

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