Washington faced a deepening dilemma last night after North Korea declared it would expel United Nations nuclear non-proliferation monitors.

And Pyongyang raised the stakes still further by saying it would finish building its "nuclear power plants" and reactivate a reprocessing plant.

North Korea has two incomplete reactors , with an estimated capacity of 50MW and 200MW, which, according to at least one US estimate, could produce enough plutonium for nearly 30 atomic bombs a year.

There was an angry reaction from the International Atomic Energy Agency (IAEA) over the expulsion of its inspectors, which would deprive the agency of its last means of ensuring that North Korea´s nuclear programme was not being used to create weapons.

Earlier this week, as part of a series of moves calculated to provoke Washington in the midst of the Iraq crisis, North Korea moved hundreds of fuel rods to a storage room near an atomic research reactor, which it says it will fire up within two months.

The CIA believes the 5MW reactor can produce enough weapons-grade plutonium to make one nuclear bomb a year; it is also concerned about 8,000 spent fuel rods which the North Koreans have in storage – enough to make plutonium for five nuclear weapons.

The Americans believe that the North Koreans may already have several warheads. They see that as worrying, but they are also deeply concerned about weapons of mass destruction falling into the hands of al-Qa´ida.

Earlier, North Korean officials broke hundreds of IAEA anti-tamper seals and taped over surveillance cameras at several plants, including the atomic reactor, at Yongbyon.

Yesterday, the US called on North Korea to scrap its nuclear weapons programme. Washington said it would not be blackmailed into negotiations by Pyongyang´s "threats or broken commitments". A White House spokeswoman, Claire Buchan, said: "We call on the DPRK [North Korea] to reverse its current course and to take all steps necessary to comply with the International Atomic Energy Agency ... to eliminate its nuclear weapons programme in a verifiable manner."

The Foreign Office denounced the expulsions as "very worrying, dangerous and unacceptable".

So far, President George Bush has refused to make any concessions. That position was reiterated by the Foreign Office. China and Russia – both seen by the US as "soft" on the North Koreans – called for a dialogue between Pyongyang and Washington.

The Russians showed signs of trying to manoeuvre themselves into the mediator´s chair. Their Atomic Energy Minister, Alexander Rumyantsev, blamed the crisis on a US-led decision to cut supplies of fuel oil to North Korea. The fuel deliveries were cut after US intelligence established that the North Koreans had an active and secret uranium- enriching programme in violation of a 1994 accord. (© 2002 Independent Digital (UK) Ltd 12/28/02)