Key Points:

The secretive North Korean regime is coming out of its shell and is prepared to make increased contact with the outside world, Foreign Minister Winston Peters says.

At the end of a three-day trip to the communist state - the first by a Western minister since North Korea outraged world opinion last year by carrying out nuclear tests - Mr Peters said Kim Jong Il's regime was making good progress on denuclearisation.

North Korea had doubled the number of people working on projects such as the dismantling of its main nuclear facility, and was committed to the success of the six-party talks on the issue.

If things progressed well, North Korea would need help to rebuild its economy, and New Zealand could help.

"That [denuclearisation] is the key element here. As the six-party-talks phases tick off, we are able to begin to grow our bilateral relationship, and I think many other countries would join in as well. There's a very, very big prize here, that we could have a nuclear-free North Korea."

Mr Peters met President Kim Yong-Nam, Foreign Minister Pak Ui-Chun, and the Ministers of Trade and Agriculture. He said the North Koreans were keen to expand their relationship with New Zealand, and areas where the two countries might co-operate were canvassed.

"I said, 'If you want to see what can happen if you have an economy that does work and has the right elements to it, then I would like you to come to New Zealand'."

Mr Peters said he had raised human rights concerns with the North Koreans as an area that worried the international community and one where the world expected progress to be made.

His visit included stops at a garment factory and farm, but Mr Peters was cautious about giving an overall assessment of life in a country few foreigners are permitted to visit,

"I don't like to give my impressions after only three days. I came with certain impressions from my reading of background information. It is clearly a society that is unusual in most respects with the freedom of movement and information, but I saw glimmers of enough change to believe that we could be seeing a change going on here."

Mr Peters now travels to the United States for talks with senior officials, including Secretary of State Condoleezza Rice. He said while the North Korean visit would be discussed, issues in the Pacific and particularly in Afghanistan would be the focus of the talks.