The FT article was based on a two-hour interview in Pyongyang between Selig Harrison -- a US expert on North Korea -- and high-ranking North Korean officials including Kim Yong-nam, President Kim Jong-il's deputy, and foreign minister Paik Nam-soon.

"We're entitled to sell missiles to earn foreign exchange," Kim Yong-nam said, according to the FT report.

"But in regard to nuclear material our policy past, present and future is that we would never allow such transfers to al-Qaeda or anyone else. Never."

A nuclear impasse between Washington and Pyongyang erupted in October 2002 when the US charged that North Korea had not kept its part of the bargain by breaking a 1994 nuclear freeze and launching a secret nuclear weapons program.

The United States said it had learned "conclusively" that the Stalinist state was pursuing a covert nuclear weapons program based not on plutonium but on uranium enrichment.

"We want a nuclear-free Korean peninsula, and we have no intention of getting engaged in a nuclear arms rrace with neighbouring nations," said Kim Yong-nam, according to the FT report.

"The only reason we are developing nuclear weapons is to deter an American pre-emptive attack," he said.

"After all, we have been singled out as the target for such an attack and we are the justification for the development of a new generation of US nuclear weapons.

"We don't want to suffer the fate of Iraq," he was quoted as saying.

Washington is demanding the complete, verifiable, and irreversible dismantling of North Korea's nuclear programs, both plutonium and enriched uranium, before it will offer concessions to the impoverished state.

Harrison is the director of the Asia programme at the Centre for International Policy in Washington.

According to the FT, he has had high-level access to North Korean leaders since 1972, when he became the first American to visit Pyongyang after the Korean war and was the first journalist to interview former leader Kim Il-sung.

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