Diplomatic victory for China as North Korea resumes nuclear talks

Three weeks after conducting its first nuclear test, which sent shockwaves round the world, North Korea yesterday agreed to return to the negotiating table.

The decision is a diplomatic victory for China, North Korea's Communist ally and a veto-holding power on the United Nations Security Council, which lost patience after the nuclear test on 9 October.

It also emerged yesterday that China cut off oil supplies to its neighbourin September amid reports that a test was imminent and sent an envoy to read the riot act to North Korea's "Dear Leader", Kim Jong Il, before hosting yesterday's talks in Beijing.

China's Foreign Ministry said North Korea had decided to return to the negotiations after the "candid and in-depth" meeting between Chinese, US and North Korean officials in Beijing.

Pyongyang has been urged to rejoin the six-party talks as the most promising forum for resolving the long standoff over its nuclear weapons programme. UN financial and weapons sanctions imposed after its test are to remain. But President George Bush welcomed North Korea's move. He thanked China for its role in wringing the agreement from the regime, which has become even more isolated since the nuclear test.

Christopher Hill, the American envoy who attended the negotiations, said the six-party talks could resume as early as this month. He said the next round would address North Korea's concerns with the US financial restrictions, possibly through a working group. He added that Pyongyang must renounce "illicit activities" that the US has said include currency counterfeiting and drug trafficking.

Even before detonating its nuclear device, North Korea had been subjected to a gradual tightening of the screws, beginning in September last year when the US treasury department suddenly moved against a bank in Macau, Banco Delta Asia, over the American suspicions.

The financial move, resulting in the freezing of £14m of funds, came just after a deal had been struck under which the US had agreed to provide security guarantees to Pyongyang in return for the North abandoning its nuclear weapons programme.

Of the other three countries in the talks, South Korea and Russia welcomed the breakthrough, but Japan, now led by a hardline prime minister, warned that it would not permit North Korea to return to negotiations unless it renounced nuclear weapons. Taro Aso, the Foreign Minister, said Japan " does not intend to accept North Korea's return to the talks on the premise that it possesses nuclear weapons".

Chinese trade statistics show that North Korea, which depends on China for about 90 per cent of its supplies, received no crude oil at all from its neighbours.

The US has consistently refused to engage in bilateral talks with the regime. The agreement suggested Washington had agreed to a concession on the US financial sanctions. Mr Kim was quoted as telling the Chinese envoy that "if the United States gives in to a certain degree, we will also do so, whether it's bilateral talks or six-party talks".

Mr Hill cautioned that much work remained to prepare for the resumption of the talks. Among the issues would be how would North Korea take steps to give up its nuclear programmes, he said. "We're a long way from our goals here," said Mr Hill in Beijing. "I have not broken out the champagne and cigars yet."