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South Korea sued North Korea on Wednesday for $35 million in compensation for a liaison office that North Korea blew up in 2020, in a case highlighting the breakdown of ties between the neighbours as the North presses on with its weapons programmes.

North Korea blew up the liaison office, set up in 2018 on its side of the border to foster better ties, after threatening retaliation for North Korean defectors in the South waging a propaganda leaflet campaign.

A South Korean official said the suit, lodged with the Seoul Central District Court, was the first the government had ever filed against the North.

The South Korean Unification Ministry, which handles inter-Korean affairs, said the case had to be filed before June 16 to comply with a three-year statue of limitations under South Korean law.

"This action is taken to preserve national claims and interrupt the statute of limitations of the right to claim compensation for damages," the ministry said in a release.

Reclusive North Korea does not accept queries from foreign journalists. A South Korea official, asked about the likelihood of the North engaging with any such legal process, said it was still necessary to file the suit on time.

The liaison office was the first diplomatic mission of its kind between the rivals and was a symbol of reconciliation at a time of optimism over several projects aimed at reducing tension.

North Korea blew it up in front of state media cameras after complaining of the defectors' campaign of floating propaganda leaflets into the North tied to balloons.

South Korea estimated the cost of the destroyed office and a badly damaged 15-storey building nearby to house South Korean officials, was 44.7 billion won ($35 million).

South Korea said the North's demolition was a "violent" and "illegal" act that undermined trust and infringed on the property rights of the South and its people.

North and South Korea remain technically at war because their 1950-53 conflict ended in a truce, not a treaty.

Nuclear-armed North Korea has over the past year or more been testing various weapons, including its biggest intercontinental ballistic missile, ramping up tension with the South and its main ally, the United States. (Reuters)