Daniel Glaser, the deputy assistant secretary for terrorist financing and financial crimes, held talks with officials from China's foreign ministry, the central bank and the country's banking industry regulator, said spokeswoman Molly Millerwise.

Glaser had met with the Chinese the day before, following talks Monday night with officials at the North Korean embassy.

Millerwise said the two sides discussed how to implement a deal announced last week that would see 25 million dollars frozen in a Macau bank due to accusations of money laundering and counterfeiting returned to North Korea.

Glaser was joined in Tuesday's talks by US Ambassador to China Sandy Randt, as well as Chinese Vice Foreign Minister Wu Dawei, chair of the six-nation talks on dismantling North Korea's nuclear weapons programme, Millerwise said.

She did not offer any other specifics about the meetings or say when a resolution was likely.

However the chief US envoy to the six-nation talks, Christopher Hill, said in Washington on Monday that he expected the issue to be resolved in a couple of days.

The nuclear talks broke down last week after North Korea refused to enter a new round of negotiations until the 25 million dollars was safely returned.

The money was supposed to be transferred quickly to a North Korean account with the Bank of China.

However the state-owned lender has reportedly refused to accept the money for fear the transaction may hurt its credit rating.

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