SEOUL -- North Korea rejected Tuesday a U.S. demand to allow its nuclear facilities to be inspected and warned it may pull out of a landmark deal that has frozen its nuclear program.

The North's Foreign Ministry spokesman said the 1994 Agreement, which allowed a nuclear reactor to be built in the country in return for it reining its nuclear weapons program, "stands at the crossroads of abrogation or preservation".

U.S. envoy for Korean affairs Jack Pritchard last week called on North Korea to open its nuclear facilities for international inspections and comply with the Non-Proliferation Treaty.

The spokesman said through Pyongyang's official Korean Central News Agency monitored in Seoul that a delay by the United States in meeting its end of the agreement could push the North into abandoning the deal completely.

Under the so-called Agreed Framework (AF) reached in 1994, the North should allow inspections by the International Atomic Energy Agency to verify that it has no nuclear ambitions in return for receiving the U.S.-arranged power plant.

The North agreed to freeze its nuclear development program and the U.S.-led Korean Peninsula Energy Development Organization (KEDO) was set up to build the five-billion-dollar nuclear power plant.

But the project has been delayed. A set of two Light Water Nuclear Reactors (LWRS) was originally meant to be completed by 2003, but the deadline has now been pushed back to 2008, AFP reported.

The first concrete was poured into the foundations of one reactor in the North's city of Kumho last Wednesday, when Prichard urged the North to come clean about its past nuclear activities by allowing inspections.

But the North's ministry spokesman said "what is most urgent" was U.S. compensation for the delays in constructing the nuclear power plant. He said: "By delaying the construction of the LWRS the U.S. has caused a huge loss of electricity to the DPRK (North Korea) and created grave difficulties in its economy as a whole." "The AF stands at the crossroads of abrogation or preservation due to the ... delay in the provision of the LWRS, its core issue."

"The reality is pushing U.S. to the phase where we should make a final decision to go our own way," he said.

The comment reaffirmed the North's stance that the communist state would not allow any nuclear inspections on its soil in the immediate future.

U.S. and KEDO officials have said the delays were caused by a strike involving North Korean workers demanding higher wages and tensions raised by Pyongyang.

The plant was to contain two 1,000-megawatt light water reactors, which would produce significantly less weapons grade nuclear material than an old nuclear plant built during the Soviet era.

KEDO Executive Director Charles Kartman last week said that the Korean Peninsula was heading for a war in 1994 when Washington strongly suspected the North might have secured weapons-grade plutonium.

The potential nuclear crisis was headed off with the signing of the Agreed Framework in Geneva in 1994.

Pyongyang had denied its nuclear ambitions. But U.S. intelligence authorities suspected the North might have already secured weapons-grade plutonium enough to make one or two nuclear bombs.