The survey released by the National Unification Advisory Council found that 73.8 percent saw the nuclear weapons development as a threat while 25.7 percent said it was not.

Yet 82 percent of 1,008 people questioned said Seoul should expand or maintain the current level of economic exchanges with Pyongyang, and 15.4 percent wanted suspension or curtailment.

It was the state body's first survey of inter-Korean relations since conservative President Lee Myung-Bak took office in February.

Relations soured after Lee promised to take a firmer line with the North after a decade-long "sunshine" engagement policy under his liberal predecessors.

The survey showed that 49.8 percent support Lee's policy towards North Korea while 46.4 percent oppose it.

The North is now threatening to shut down a Seoul-funded industrial estate at Kaesong in protest at what it calls South Korea's confrontational policy.