"Although the Bank of China will be able to undertake this transaction, we need to consult with them," Wu Dawei told a briefing in Beijing.

"The bank has its own concerns, and the government needs to help them in addressing these concerns."

The United States on Monday announced that the money, frozen due to US accusations of money laundering and counterfeiting, could now be released, raising hopes of progress at nuclear disarmament talks in Beijing this week.

But those negotiations ended abruptly Thursday when North Korea's chief envoy flew home because the cash had still not been transferred to a North Korean account at the Bank of China in Beijing.

The Bank of China -- one of the nation's four state-owned commercial lenders -- said earlier on Thursday that it had not yet been asked to transfer the money.

"Up to now we have not been asked to do this business," Li Lihui, the vice chairman and president of the Bank of China, told reporters in Hong Kong.

Wu told the briefing that apart from state-controlled bank's own concerns, procedural issues made the transfer difficult.

"If you want to remit money more than 10,000 dollars, you need to go through a settlement center in the United States. Even for this amount to through all the relevant procedures will take at least one week," he said.

He said various practical solutions had been discussed, including writing a check to North Korea, or transmitting the money in cash.

Wu also said he had suggested that an unidentified South Korean foreign exchange bank with a branch in North Korea could handle the transaction, but did not indicate how South Korea had responded or give any other details.

US envoy says NKorea still on track to shut reactor
Beijing (AFP) March 22 - International efforts to end North Korea's nuclear weapons programme remain on track despite the suspension of six-nation negotiations here on Thursday, the chief US envoy said.

"The six-party process continues to be on track," Christopher Hill told reporters. "It is our strong view that we are on schedule to meet the 60-day requirement."

Under a six-nation accord signed on February 13, North Korea said it would shut down its main nuclear reactor at Yongbyon and allow UN atomic inspectors back into the country within 60 days.

In return, the impoverished North Korea would receive 50,000 tonnes of fuel for energy use.

Hill also said he felt the Yongbyon reactor could be "disabled" by the end of the year as part of the longer-term efforts to permanently and irreversibly end the North's nuclear weapons programme.

"I believe we will be able to make a timetable for disablement within this calendar year," Hill said.

"But you know, disablement is not our goal. Disarmament is our goal."

According to the February accord, North Korea, which conducted its first atomic weapons test in October last year, would receive one million tonnes of heavy fuel or equivalent energy aid if it permanently dismantled its nuclear weapons programme.

The latest round of six-nation talks began on Monday amid high hopes major progress would be made in cementing the accord after the United States said it would allow the return of 25 million dollars of frozen North Korean assets.

But North Korea refused to negotiate until the cash, which had been frozen in a Macau bank due to US accusations of money laundering and counterfeiting, was safely back in its coffers.

By late Thursday the cash had still not been transferred to a North Korean account at the Bank of China in Beijing, and Pyongyang's envoy in the Chinese capital boarded a plane and flew home.

At the same time, a senior Bank of China official said it had not yet been asked to get involved in any transfer.

Hill said the dispute over the money showed the problems with North Korea, one of the most politically isolated and secretive nations in the world.

"To me this highlights the degree of the DPRK's isolation, it has been difficult to return money to them even when everyone wants to return money to them," Hill said.

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