North Korea should have shut down and sealed its nuclear reactor by April 14 under a six-nation deal reached in February. The deadline slipped due to delays in freeing up 25 million dollars in its funds frozen in Macau.

"The February 13 agreement reached at the six-party talks will be implemented," Roh said after a summit with visiting Italian Prime Minister Romano Prodi.

"A technical problem has unexpectedly occurred ... but the problem has almost been resolved," he said, referring to the bank dispute. "The agreement will not be nullified by the problem."

A South Korean government delegation meanwhile flew to Pyongyang Wednesday for economic talks, with Seoul's possible rice aid and other business projects on the agenda.

Some local news reports say the annual aid of 400,000 tonnes of rice may not be pledged unless the North shuts down Yongbyon before the economic meeting ends Saturday.

Officials have said they will urge the North to start denuclearising but have not said if the issue will be linked to rice.

"Despite various difficulties, I will do my best to agree smoothly on pending issues to improve inter-Korean relations," said Seoul's vice economic minister and chief delegate Chin Dong-Soo.

South Korea suspended the regular annual aid after the North's missile tests last July. Relations worsened further after its October nuclear test but improved when the North returned to the nuclear disarmament talks.

The United States, China, the two Koreas, Japan and Russia reached the deal under which the North should disable its nuclear programmes in exchange for a million tons of fuel oil or equivalent aid, plus security and diplomatic benefits.

Under the first phase it was supposed by last Saturday to have shut down and sealed Yongbyon, which produces the raw material for plutonium to make bombs, in the presence of UN atomic inspectors.

It missed the deadline because of delays in freeing up 25 million dollars which had been frozen in a Macau bank at US instigation since 2005.

The United States said the money was made available last week.

But there has been no word on when the cash transfer will be made nor notification of when North Korea will begin shutting down the reactor.

Seoul's intelligence service said Tuesday that US satellites had spotted unusual activity around Yongbyon. News reports said Pyongyang may be preparing to shut it down.