North Korea expels all South Koreans from joint industrial zone

North Korea on Thursday expelled all South Koreans from the jointly run Kaesong industrial zone and seized their factory assets, saying Seoul's earlier decision to shutter the complex had amounted to a "declaration of war".

Pyongyang said it was placing Kaesong, which lies 10 kilometres (six miles) inside North Korea, under military control and cutting two key communication hotlines with Seoul.

The measures mark a significant escalation of cross-border tensions that have been elevated since North Korea carried out a nuclear test last month and a long-range rocket launch on Sunday.

Seoul had announced on Wednesday it was closing down operations at Kaesong, and the North said it would now experience the "disastrous and painful consequences" of that action.

By shutting Kaesong, the South had killed the "last lifeline" of North-South relations and made a "dangerous declaration of war" that could bring the divided peninsula to the brink of conflict, the North's Committee for the Peaceful Reunification of Korea (CPRK) said in statement.

Relations between the two Koreas have always been volatile, but analysts said the current situation risked turning into a full-blown crisis.

- 'No more buffers' -

"Now we can say that all strings between the Koreas have been cut and that there are no more buffers," said Ko Yoo-Hwan, a professor of North Korean Studies at Dongguk University in Seoul.

"An escalation of tensions is inevitable, and I see further trouble ahead with Kaesong and the issues of seized assets, especially if North Korea militarises the zone," Ko said.

All South Koreans were ordered to leave Kaesong by 5:00 pm Pyongyang time (0830 GMT) and told they could take nothing but their personal possessions.

The order was published by the North's official KCNA news agency just 30 minutes before the expulsion deadline.

The North also said it had ordered a "complete freeze of all assets," including raw materials, products and equipment.

The owners of the 124 South Korean companies operating factories in Kaesong had sent hundreds of staff and empty trucks into the North on Thursday morning in the hope of bringing out as much as they could.

It was not immediately clear how many were still in the estate when the order to leave was issued.

"We will make the utmost efforts to make sure that all our nationals return home safely," Seoul's Unification Ministry said in a statement.

- Sneaking goods out -

Several people who crossed back into the South on Thursday morning said they had noticed an increased military presence in Kaesong, including armed soldiers carrying backpacks and sleeping bags.

Despite the ban on removing anything beyond their personal belongings, some trucks crossing the border after the expulsion order were carrying factory materials.

"No one stopped us when we were moving our goods into the truck," said Park Seung-Gul, the manager at a textile company in Kaesong.

Defending its decision to halt operations at Kaesong, Seoul said North Korea had been using the hundreds of millions of dollars in hard-currency that it earned from the estate to fund its nuclear weapons and ballistic missile programmes.

The government's move was slammed as "utterly incomprehensible" by the Kaesong company owners who said their businesses were being destroyed by politics.

Born out of the "sunshine" reconciliation policy of the late 1990s, Kaesong opened in 2004 and proved remarkably resilient, riding out repeated crises that ended every other facet of inter-Korean cooperation.

Earlier in the day, the United States signalled its own unilateral moves against North Korea, with the US Senate unanimously adopting a bill expanding existing sanctions.

The United States and its main Asian allies, South Korea and Japan, have led a push for tough UN Security Council sanctions over the North's nuclear weapons programme, but have met resistance from North Korea's main diplomatic protector China.

Although fiercely critical of Pyongyang's nuclear ambitions, Beijing is more concerned at the prospect of Kim's regime being pushed to collapse -- triggering chaos on China's border.