South Korea has decided to pull the last of its workers out of Kaesong Industrial Complex in North Korea, as Seoul announced moves to help affected firms.
A total of 125 South Koreans left the joint Kaesong complex on Saturday, and the remaining 50 were expected to leave on Monday, officials said.
They had been due out at 17:00 local time but were delayed by “details” that needed “ironing out”, officials said.
The move came after North Korea rejected talks on Kaesong industrial park.
Tensions are high following Pyongyang’s third nuclear test in February.
Pyongyang has been angered by tightened UN sanctions imposed after its February 12 nuclear test and by joint US-South Korea military drills, which are scheduled to end on Tuesday.
Kaesong Industrial Complex, which was launched in 2003 to boost inter-Korean ties, is a factory park situated just inside North Korea.
It is home to 123 South Korean companies which employ North Korean workers, and provides the North with much-needed hard currency.
Earlier this month, North Korea blocked South Korean workers from entering the zone. It withdrew its 53,000 workers from the industrial park a few days later.
Although the North has restricted entry to Kaesong Industrial Complex in the past, this would be the first time that all South Korean workers had withdrawn.
The remaining 50 workers had been expected to cross the border back into South Korea at 17:00.
“The two sides are currently in the process of ironing out some details, with most of the outstanding issues having been worked out,” a spokesman at South Korea’s Unification Ministry said.
He still expected the workers to return on Monday, South Korean news agency Yonhap quoted him as saying.
Earlier on Monday, the Ministry told reporters that North Korea had not yet approved the passage of the workers across the border. Pyongyang said last week it would not hinder those leaving the Kaesong complex.
Some of the workers were reportedly reluctant to leave Kaesong, fearing that company assets would be seized.
Han Jae-kwon, chairman of the Association of Kaesong companies, said: “Those remaining workers are there to take charge of products owned by our customers and raw materials, so we want detailed measures to protect them after the workers have been pulled out.”
The South Korean government said it had set up a taskforce to help companies who had been forced to halt operations at Kaesong.
The taskforce would “assess damages suffered by the firms with factories at Kaesong and… devise comprehensive and practical supportive measures,” the Prime Minister’s Office said in a statement.
The South Korean government had discussed a variety of support measures, including the possibility of offering businesses loans from the inter-Korean co-operation fund, the statement added.
Meanwhile, North Korea seems to be gearing up for a major land and air military exercise, Yonhap said on Sunday, citing a government source.
A US citizen is also due to be tried soon on charges of attempting to overthrow the North Korean government, according to the North’s official news agency KCNA.
Pae Jun-ho, who is known in the US as Kenneth Bae, was held last year after entering North Korea as a tourist.
No date for the verdict has been confirmed, and it is not clear what sort of sanction Kenneth Bae might face, although North Korea’s criminal code provides for life imprisonment or the death penalty for similar offences.