Communist North Korea has completed deployment of medium-range missiles and expanded the size of its military to 1.2 million, South Korea said Monday in an assessment of the threat from its neighbour.

The intermediate-range missiles can travel up to 3,000 kilometers (1,860 miles), enough to reach the northern tip of Australia, and carry a warhead of up to 650 kilograms (1,430 pounds), the 2008 defence white paper said.

It also said the North is "presumed" to have secured about 40 kilograms of atom bomb-making plutonium from reprocessing spent nuclear fuel rods from its Yongbyon reactor.

However, it dropped an earlier reference to the presumed manufacture of one or two nuclear bombs -- an apparent attempt to deny the North the status of a nuclear power.

Pyongyang carried out its first atomic test in October 2006, but it is not known whether it could manufacture a nuclear warhead.

The document was published as the North steps up threats against the South and continues apparent preparations to launch its longest-range missile.

It described North Korea as a "direct and serious threat" to South Korea's security, a stronger term than "serious threat" used in previous papers.

The white paper did not indicate how many medium-range missiles the North has "deployed for operational use" since 2007, but added that Pyongyang began to develop them in the late 1990s.

Pyongyang has expanded the warhead capacity of its short-range missiles by 170 to 200 kg across the board over the past few years, it added.

The size of its military had grown to 1.19 million, an increase of 20,000 from 2006, while the number of its lightly-equipped special forces trained to swiftly infiltrate South Korea had increased 50 percent to 180,000.

The paper said North Korea had increased the number of its multiple rocket launchers by 300 over two years to about 5,100 and reinforced its submarines.

Monday's published assessment came amid mounting tensions between the two Koreas, which are still technically at war since the 1950-1953 Korean conflict ended only in an armistice.

The North is angry with the South's conservative President Lee Myung-Bak, who has scrapped a policy of largely unconditional aid and engagement.

It has cancelled all peace accords with Seoul -- including one recognising their disputed sea border as an interim frontier -- and state media has warned of war.

US and South Korean officials have already said the North is preparing to test-fire its longest-range missile, the Taepodong-2, which has an estimated range of 6,700 km that puts Alaska within striking distance.

The missile could be ready for launching by the end of this month, British defence analysis group Jane's said Friday.

Pyongyang first tested the Taepedong-2 in 2008 but it blew up after just 40 seconds. The white paper said its technology remains "under development."

US Secretary of State Hillary Clinton, in strong comments Friday in Seoul, warned the North to stop provocation and said its war of words with the South would not help it forge a new relationship with Washington.

She said any missile test would breach a UN resolution, and urged Pyongyang to comply with a six-nation nuclear disarmament pact.