North Korea's nuclear programme has reached a "very alarming level" and could cause havoc in South Korea if Pyongyang develops smaller mobile weapons, a senior Seoul presidential aide says.

"North Korea's nuclear threat has progressed at a rapid pace and reached a very alarming level, while the nuclear programmes are evolving even now," JoongAng Ilbo newspaper quoted Kim Tae-Hyo as telling a forum Tuesday.

Kim, the president's deputy national security adviser, confirmed the comments to AFP Wednesday.

The aide said Pyongyang was believed to be operating all its nuclear programmes, including the Yongbyon nuclear reactor which produces weapons-grade plutonium, and a separate highly-enriched uranium project to make bombs.

"If the nuclear warheads are made compact and deployed to the field, they could wreak immense havoc on South Korea regardless of their precision level," JoongAng quoted him as saying.

The North closed down Yongbyon in 2007 under a six-nation disarmament deal, but quit the pact in April 2009 and announced it would restart operations at the complex.

In September 2009 it said its experiments with uranium enrichment had reached their final phase.

South Korea's defence minister said this week the North was restoring facilities at Yongbyon.

He was speaking after a private US research institute, citing satellite photos, said new construction or excavation is under way there.

Presidential aide Kim Tae-Hyo also warned of potential dangers from the leadership succession process which has begun in the North.

Kim Jong-Un, youngest son of leader Kim Jong-Il, has been appointed a four-star general and been given powerful party posts.

The untested young protege may be "tempted to launch provocations or other daring moves" to showcase his presence to the world during the power transition, the aide warned.

"It is important to make him aware that making such choices would put inter-Korea relations in irreversibly significant jeopardy."

The North's current plutonium stockpile is estimated to be enough for six to eight bombs. It tested atomic weapons in October 2006 and May 2009.

Its Vice Foreign Minister Pak Kil-Yon told the United Nations last week his country must strengthen its nuclear deterrent in the face of what he called threats from the United States.

The North has indicated willingness in principle to return to the six-party forum chaired by its ally China. But it says it wants separate talks with the United States about signing a permanent peace treaty on the peninsula.

South Korea will next week stage a naval exercise with the United States, Japan and Australia off the southern city of Busan, the defence ministry said.

The drill is part of the US-led Proliferation Security Initiative (PSI) to intercept shipments of weapons of mass destruction including nuclear arsenals.

The ministry said the October 13-14 exercise would practise how to stop and inspect ships suspected of carrying such weapons.

The North has vehemently criticised the South's decision to join PSI, calling it a "declaration of war".

"The exercise scenario is not targeting a specific country," Yonhap quoted a defence ministry official as saying.

N.Korea's heir apparent watches military drill with father
Seoul (AFP) Oct 5, 2010 - The youngest son of North Korean leader Kim Jong-Il has watched a military exercise along with his father, state media said Tuesday, his first such inspection since he was confirmed as heir apparent.

The report signalled a rapid rise to public prominence for Kim Jong-Un. The son's name and photograph had never appeared in official media until last week, when he was made a four-star general and given powerful ruling party posts.

The live-fire drill, also attended by top party and military officials, was staged ahead of a ruling party anniversary this Sunday, the Korean Central News Agency reported.

It did not say when or where the drill took place but referred to the younger Kim as vice-chairman of the party's central military commission, one of the posts he took last week.

"The troops powerfully displayed the power of the Korean People's Army that grew into invincible forces through training and under the guidance of General Kim Jong-Il," it said.

"This report shows to the outside world that Jong-Un has a firm position as heir apparent," Dongguk University professor Kim Yong-Hyun told AFP.

"By accompanying his father during field trips, the son is now being trained openly as successor. The drill also implies the son will inherit the father's army-first policy."

The North has a 1.2-million-member standing military whose welfare takes priority over civilians under the Songun (army-first) policy.

South Korean Defence Minister Kim Tae-Young predicted on Monday that the son would now begin public activities, as eventual successor to his ailing 68-year-old father.

The minister said the North appeared to be using the anniversary of the founding of the Workers' Party on October 10 to celebrate "the formation of a succession platform", and planned a major military parade and war games.

The leader-in-waiting of the impoverished but nuclear-armed nation remains a mystery to the outside world. The Swiss-educated Jong-Un, thought aged around 27, is not known to have held any formal posts before last week.

South Korea said it was closely monitoring work detected on satellite images at the North's Yongbyon nuclear reactor, the source of its weapons-grade plutonium.

Minister Kim said the North was restoring some facilities at the plant, closed in 2007 under a disarmament deal which Pyongyang angrily renounced in April 2009. A month later, it staged a second nuclear test.

Cross-border relations have been icy since the South accused the North of torpedoing one of its warships and killing 46 sailors in March, a charge it denies.

The South has warned of further possible provocations by the North as it puts its succession plan firmly in place and in the run-up to the G20 summit in Seoul in November.

The defence minister told parliament Tuesday the South would launch a full-scale propaganda war in response to any fresh provocation.

The South's military printed hundreds of thousands of leaflets and installed border loudspeakers as part of reprisals for the warship sinking.

Minister Kim said preparations were under way to float the leaflets and small radios by balloon across the tense and heavily fortified border.

"We will immediately switch loudspeakers on and launch leaflets" if there is a new provocation, or if a political decision is made to apply pressure on North Korea, he told legislators.

The North has threatened to open fire at the loudspeakers if they are switched on.

The minister also said that a North Korean jamming device capable of disrupting guided weapons poses a fresh threat to the South's security.

He said the North had imported Russian equipment to jam South Korea's Global Positioning System reception.

In one positive note, the two sides have agreed to resume reunions late this month for families separated by war 60 years ago.