The Act party wants the Government to cut off all aid money to North Korea until the rogue state stops its nuclear weapons building programme.

Leader Richard Prebble said New Zealand had handed $4.5 million of taxpayer money to North Korea without getting any proof that the communist nation had stopped developing nuclear weapons.

The Herald revealed yesterday that New Zealand was one of many Western nations hoodwinked into pouring money into North Korea in the mistaken belief that it had mothballed its nuclear weapons industry.

Two weeks ago the Pyongyang Government admitted to the United States that it was still engaged in a clandestine uranium-enrichment programme.

Prime Minister Helen Clark said at the Apec conference in Mexico yesterday that New Zealand had spent $4.5 million on a US-led programme to try to encourage the North Korean energy programme in a "positive and peaceful" direction.

"What can we do about it? North Korea is now very dependent on the indulgence of other countries.

"Its economy was wrecked, it couldn't feed its people and the international community came in to help," she said.

But Mr Prebble said the New Zealand Government intended to continue pouring money into North Korea, and that had to stop until there was a guarantee the nuclear weapons programme had stopped.

"It's bad enough to discover the New Zealand taxpayer has spent $4.5 million on a programme that was to halt the North Korean development of a nuclear bomb, only to find we have been conned," he said yesterday.

"But now we learn that the Labour Government intends sending North Korea more money and the programme has not even been halted - $4.5 million would have paid for a lot of heart operations."

He said not only should the aid programme stop, but New Zealand should demand its money back.

The 21 leaders from the Pacific Rim in Mexico have issued a joint statement calling on North Korea to stop its nuclear programme, saying it could miss out on the economic benefits of regional co-operation if it does not comply.

The statement reflected a rare unity among Apec nations, some of which - including South Korea and Japan - are nervous about the potential for a North Korean nuclear strike.

"We uphold that a nuclear-weapons free Korean Peninsula is important to the peace and stability of the peninsula and Northeast Asia, and is also in the interests of all members of the region," the statement said.

The United States in 1994 led efforts to get North Korea to abandon its nuclear weapons industry, and signed an agreement pledging US$4 billion ($8.2 billion) of world help to move the country to a peaceful energy industry.

New Zealand was one country which agreed to help pay for the purchase of light-water nuclear power plants, which would not be capable of use in weapons development, and the supply of heavy fuel oil.

Foreign Minister Phil Goff said yesterday that New Zealand wanted to end its support for the programme now, but other Apec nations had asked for North Korea to be given time to comply.

He said the US seemed more concerned with Iraq and its possible weapons industry, perhaps believing Iraq was more likely to pass nuclear weapons materials to terrorist groups.

- STAFF REPORTER