Seoul  - The South Korean government Tuesday called on North Korea to drop its confrontational attitude and resume talks aimed at improving relations between the two countries.

"North Korea must accept our offer to talk with us unconditionally," Unification Ministry spokesman Kim Ho-Nyoun told a press conference.

"We stress again that we intend to talk with North Korea anytime, anywhere and at any level," he said.

He was speaking after the South Korean government denied a Yonhap news agency report on Monday that North Korea had advised Seoul it was willing to return some South Korean prisoners of war (PoW) and civilian abductees in exchange for economic benefits.

"Our stance to do our best to get the release of our PoWs remains unchanged," said the spokesman. "But the Yonhap report is not true."

According to the report by the official South Korean news agency, Pyongyang made the proposal through various channels in hopes of resuming some of the economic projects that have been suspended since South Korean President Lee Myung-Bak took office in the beginning of this year.

The report said North Korea particularly wanted to resume work on a steel plant, a petro-chemical complex, a food factory and a highway between the capital, Pyongyang, and the northern industrial city of Shineuju.

Yonhap said North Korea was also eager to resume work on the construction of 100,000 houses in Pyongyang.

At least 560 former South Korean soldiers are believed to have been held in the communist North since they were taken prisoner during the 1950-53 Korean War.

The two Koreas are rumoured to have begun secret talks, but both countries continue to snub each other officially.

The rumours began when South Korea's Unification Minister, Kim Ha-Joong, arrived in Bejing Sunday on a four-day visit to meet senior Beijing officials, including State Councillor Dai Bingguo and Foreign Minister Yang Jiechi.

South Korean media have reported that the visit may be intended to involve China as a mediator to support attempts to improve inter-Korean relations. (dpa)