SEOUL South Korean union leaders announced on Monday a further wave of strikes this week to protest against a government-led restructuring drive for debt-stricken banks and state-run firms.

They said that staff at five banks would strike from later this week, and workers at a state-run telecom operator launched their strike on Monday.

The move was a serious threat to last-ditch efforts by President Kim Dae-Jung to clean up the country's debt-stricken economic sector, which was hit by Asia's financial crisis in late 1997, AFP reported.

Unions have opposed Kim's crusade, insisting that workers should not be forced to take the brunt of the government.

An indefinite strike will begin on Friday at Kookmin, Housing and Commercial (HCB), Kwangju, Cheju and Kyongnam banks, said Lee Yong-Duk, who heads an association of bank unions.

"Other bank unions will join the strike on December 29," Lee told reporters, urging the government to cancel its push for bank mergers.

Union leaders at Korea Telecom Corp., a state-run telephone and data service company, fueled the labor unrest by also declaring an indefinite strike after overnight talks with management broke down.

"Our strike will go on unless the government delays its privatization plan which requires massive job losses," a Korea telecom union spokesman said.

Riot police surrounded Korea telecom offices as thousands of unionists braved rain and freezing temperatures to stage a sit-down at a Catholic cathedral at Myongdong in central Seoul.

However the telecom company claimed the walkout had caused no immediate disruptions to the firm's nationwide network service as many unionists ignored the strike order and there were enough replacements.

South Korea agreed to conduct economic reforms as part of a 1997 deal with the International Monetary Fund (IMF) for a $58 billion bailout.

But despite three years of reform efforts, South Korea's financial institutions are still saddled with 76 trillion won of bad loans.

President Kim has vowed to complete bank reforms by the end of the year, putting more pressure on financial authorities to force through mergers.

Kim is also pushing for the privatization of Korea telecom and other big state businesses as part of his economic reform crusade.