Peking ploy puts Pyongyang out on a limb: North Korea has lost its last important diplomatic friend, and must now make its nuclear peace with the South, Terry McCarthy writes from Seoul

WHEN South Korea normalised diplomatic relations with China last week, the response from Communist North Korea was a stony silence. In its heyday Pyongyang enjoyed fraternal relations with both the Soviet Union and China and cleverly played the two off against each other.

But in the past two years the Soviet Union has collapsed, Moscow has normalised relations with South Korea and now Peking has put the final nail in the coffin. Apart from Cuba and a few poor African states, Pyongyang is now virtually friendless.

The South Koreans have been trying - not very hard - to avoid gloating over North Korea's predicament. 'Normalisation of our relations with China was not intended to isolate North Korea,' said Lee Sang Ock, South Korea's Foreign Minister, after he had signed the normalisation agreement in Peking. But he then continued, with diplomatic tongue firmly in cheek, to dictate to Pyongyang the terms on which it can extricate itself from its isolation: 'We hope North Korea will share in the international trend of reconciliation and co-operation and speedily resolve the nuclear issue, which is blocking improvement of its relations with the United States and Japan.'

Seoul's dialogue with Pyongyang has been stalled recently. After the breakthrough treaty on reconciliation between the two Koreas, which was signed in December, North Korea has been dragging its feet. The main obstacle to progress is doubt over Pyongyang's nuclear-weapons ambitions. Although the secretive regime of Kim Il Sung allowed personnel from the International Atomic Energy Agency to inspect a known nuclear plant in April - which appeared to be free of nuclear weapons - there are fears that other laboratories may have been hidden underground for nuclear-weapons development. The North has resisted proposals from the South for mutual inspections on demand.

'I don't think North Korea will give up its atomic-bomb programme,' said Ok Tae Hwan, a director of the Research Institute for National Unification in Seoul. 'It is the basis for the survival of the regime. They have nothing else now.'

The big question is how the North will use the nuclear issue to extract concessions from South Korea. Since Seoul's normalisation with Peking, 'the North knows now it cannot reunify Korea by force - neither China nor Russia would support them now', said Mr Ok. So the stage is apparently set for some intricate nuclear blackmail.

South Korea has repeatedly stated that no progress is possible on economic links with the North until the nuclear issue is solved. After the two Koreas signed the non-aggression and reconciliation treaty in December, the US and a number of other Western countries feared that Seoul would let Pyongyang off the hook on the nuclear issue because of its eagerness to tap into North Korea's cheap labour market and natural resources.

Another, more sinister theory is that South Korea's military would not object to the North keeping some form of nuclear-weapons technology - assuming this has already been developed. According to this theory, the armies of the North and the South would unite and secretly preserve a nuclear option in case their old enemy, Japan, were to remilitarise.

Tokyo has said it will never possess nuclear weapons, but a growing Japanese stockpile of plutonium for civilian use, and Japan's undoubted technological ability to manufacture a bomb if it chose to do so, have already been highlighted for criticism by both Seoul and Pyongyang.

Mr Ok, whose institute is funded entirely by the South Korean government, acknowledged that such speculation is doing the rounds in Seoul, but discounted it, saying the government's pledge to work towards a denuclearised Korean peninsula is genuine.

The prime ministers of North and South Korea are scheduled to hold a summit in Pyongyang in mid-September. With Seoul's new link with Peking, the South is now waiting to see whether North Korea's stance will change.