S Korea freezes funds for North after ship sinking

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SEOUL, May 17 (AFP): South Korea said Monday it had suspended funding for government-level exchanges with communist North Korea amid rising tensions over the sinking of a Seoul warship and other issues.
The unification ministry, which is in charge of cross-border relations, said it has asked 10 ministries or other organisations to suspend the spending.
Relations have worsened since an explosion sank a 1,200-tonne corvette near the disputed inter-Korean border on March 26 with the death of 46 sailors. Suspicions are growing that a North Korean torpedo was to blame.
Late Saturday the South fired warning shots after two North Korean patrol craft crossed the borderline in the Yellow Sea before retreating.
Further souring relations, the North last month confiscated or barred access to South Korean assets at a joint mountain resort on its east coast. It is angry at Seoul's refusal to resume cross-border tours there.
And on Sunday the North's military threatened to stop South Koreans crossing the land border and to take other 'substantial' measures if leaflets criticising its regime keep arriving from the South.