The North said Saturday it had sent a letter inviting the UN nuclear watchdog to discuss the shutdown, adding that a banking dispute with the United States which had blocked a February disarmament pact was almost over.

South Korea on Sunday hailed Pyongyang's invitation to inspectors from the International Atomic Energy Agency (IAEA), a move also praised by Washington amid optimism that the disarmament process would now gain momentum.

"We welcome the North Korean move as good news," South Korean foreign ministry spokesman Han Hye-Jin told AFP.

"We hope the February 13 agreement will be implemented as quickly as possible following the North Korean-IAEA consultations."

White House spokesman Scott Stanzel chimed in: "This is a good step.

"Now we can hopefully continue on the path set out in the agreed February 13 framework that will lead to a nuclear-free Korean peninsula."

Japan however sounded a note of caution, with Foreign Minister Taro Aso telling reporters on Sunday: "I think we should refrain from being overly pleased at the news, at least until the nuclear facility is fully disabled."

North Korea's atomic energy chief Ri Je Son wrote IAEA director general Mohamed ElBaradei about procedures for "the suspension of operations" of its Yongbyon reactor, the state Korean Central News Agency (KCNA) reported.

The shutdown of the reactor was one of the first steps to be taken by the North under the February 13 deal, reached by the two Koreas, China, Japan, Russia and the United States.

Ri said an IAEA delegation had been invited to Pyongyang, "as it is confirmed that the process of de-freezing the funds of the DPRK at Banco Delta Asia (BDA) in Macau has reached its final phase," KCNA reported.

In Vienna, IAEA spokeswoman Melissa Fleming confirmed receipt of the invitation, adding only: "We will be deciding next steps tomorrow (Monday)."

For Koh Yu-Hwan, a North Korea expert at Dongkuk University in Seoul, Saturday's letter from the communist state was good news.

"With Pyongyang inviting IAEA inspectors, I expect to see a significant speed-up in the nuclear disarmament process," Koh said Sunday.

Under the February deal, North Korea agreed to disable its nuclear facilities in return for one million tons of heavy fuel oil or equivalent aid under the deal.

But it repeatedly refused to begin implementing the agreement until it received 25 million dollars in funds which had been frozen at BDA in 2005, over US allegations of money laundering and counterfeiting.

The money, seen by the US Treasury as illegal proceeds, was transferred out of Macau on Thursday to the New York Federal Reserve, from where it was to be sent on to a private Russian bank at which the North has an account.

US chief nuclear envoy Christopher Hill was quoted Saturday as saying technical problems had occurred as the funds were sent to the Russian bank, but that the glitch would likely be fixed by Monday.

Six-nation talks on the North's nuclear programmes could resume early next month, he was quoted as saying during a visit to Mongolia.

Hill said after telephone talks with his South Korean counterpart Chun Yung-Woo Sunday that Seoul would plan to ship fuel oil to North Korea in return for the shutdown of the Yongbyon reactor, Japan's Kyodo news agency said.