"Even now, nuclear materials sufficient to produce 10 to 20 nuclear weapons a year are still being produced" in North Korea, Lee told reporters at a New Year news conference.

At the same time, the North is continuing to improve its long-range ballistic missile technology aimed at striking the US mainland, Lee added.

"At some point, North Korea will have secured the nuclear arsenal it believes it needs to sustain the regime, along with ICBM capabilities capable of threatening not only the United States but the wider world," he said, referring to intercontinental ballistic missiles.

"And once there is excess, it will go abroad -- beyond its borders. A global danger will then emerge," he said.

A pragmatic approach was needed in addressing North Korea's nuclear issue, he said.

"The suspension of nuclear material production and ICBM development, as well as a halt to overseas exports, would also be a gain," he said.

"It would be a gain for everyone," he added, noting that he had laid out the argument to both US President Donald Trump and his Chinese counterpart Xi Jinping.

Since his inauguration in June, Lee has pushed for dialogue with the North without preconditions, a stark departure from the hawkish approach of his predecessor.

But Pyongyang has not responded to his overtures and recently accused South Korea of flying a drone into the border city of Kaesong.

Lee's office has denied it was behind the incursion but alluded it might have been carried out by civilians.