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Cash row halts N.Korea talks again

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BEIJING, China (CNN) -- Talks to resolve the crisis over North Korea's nuclear ambitions stalled again Tuesday as Pyongyang walked out of the six-party negotiations after demanding immediate delivery of $25 million in frozen bank funds.

The money, held in a bank in the Chinese territory of Macau, was reportedly due to be delivered on Wednesday after the United States reached a deal with North Korea in which funds frozen in the bank would be released for benign purposes.

That breakthrough had put six-nation talks in Beijing on North Korea back on track after months of uncertainty over Pyongyang's plans to develop nuclear weapons.

But the small print of the deal to transfer the cash from Macau's Banco Delta Asia appeared to throw up a new stumbling block.

"It is true... the North Koreans walked out," said Nori Shikata, head of the Japanese delegation in the six way talks, which also include South Korea, China and Russia.

"Until there is a transfer of money from BDA to their account they will not talk."

On Monday, the United States -- which had suspected the cash was linked to international money laundering -- said it had reached full agreement with the government of North Korea over the frozen funds.

"North Korea has pledged, within the framework of the six party talks, that these funds will be used solely for the betterment of the North Korean people, including for humanitarian and educational purposes," said U.S. Deputy Assistant Treasury Secretary Daniel Glaser in a written statement from Beijing.

"We believe this resolves the issue of the DPRK-related frozen funds."

The United States had agreed to resolve the issue as part of a deal cut last month in the Beijing talks.

Copyright 2007 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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