North Korea said Monday it was withdrawing all workers and suspending operations at a lucrative joint industrial zone with South Korea, blaming foreign “warmongers” at a time of acute tensions.

The announcement came amid reports of heightened activity at the North’s nuclear test site, and at a missile battery, although the South Korean government denied suggestions that a fourth nuclear test was imminent. North Korea “will withdraw all its employees” from the Kaesong industrial zone, Kim Yang-Gon, a senior ruling party official, said in a statement carried by the North’s official Korean Central News Agency.

Pyongyang will also “temporarily suspend the operations in the zone and examine the issue of whether it will allow its existence or close it”, Kim said of Kaesong, which sits 10 kilometres (six miles) inside North Korea.Kaesong was built in 2004 as a rare symbol of cross-border economic cooperation. It is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the 53,000 workers’ wages.

Turnover in 2012 was reported at $469.5 million, with accumulated turnover since 2004 standing at $1.98 billion. But Pyongyang has blocked South Korean access to Kaesong since Wednesday, forcing 13 of the 123 South Korean firms operating to halt production.South Korea’s unification ministry said the unilateral withdrawal “cannot be justified in any way and North Korea will be held responsible for all the consequences”.

“The (South) Korean government will calmly but firmly handle North Korea’s indiscreet action and we will do our best to secure the safety of our people and the protection of our property,” a ministry spokesman said.More than 300 South Koreans have left Kaesong and returned to the South since North Korea banned access last week. The unification ministry said 475 South citizens were still staying at the complex as of Monday.

“How the situation will develop in the days ahead will entirely depend on the attitude of the South Korean authorities,” said Kim, who blamed the pull-out on “military warmongers” who had affronted the North’s “dignity”. North Korea’s bellicose rhetoric has reached fever pitch in recent weeks, with near-daily threats of attacks on US military bases and South Korea in response to ongoing South Korea-US military exercises.

Cho Han-Bum, an analyst at the Korea Institute for National Unification in Seoul, said the Kaesong withdrawal was consistent with North Korea’s time-honoured brinkmanship.“Politically it’s a very dangerous decision to make for the North,” he said, noting that tens of thousands of North Koreans depend on the wages earned in the zone.

The US, which has met the North’s threats with some military muscle-flexing of its own, offered a calibrated concession Saturday by delaying a planned inter-continental ballistic missile test.Russian President Vladimir Putin warned Monday that any military conflict on the Korean peninsula had the potential to be worse than the 1986 nuclear disaster in Chernobyl. “If something happens, God forbid, (then) Chernobyl which we all know about very well would simply seem like a children’s fairy tale,” he told reporters at an industrial fair in Germany.

Meanwhile, UN chief Ban Ki-moon made an urgent appeal to North Korea on Monday to refrain from “any further provocation”, following reports that the increasingly isolated state is preparing a fresh missile test launch.“The Democratic People’s Republic of Korea cannot go on like this, confronting and challenging the authority of the (UN) Security Council and the international community,” Ban said in The Hague. “I am urging them to refrain from taking any further provocative measures.”

“This is an urgent and honest appeal from the international community including myself,” Ban told a press conference alongside Netherlands Foreign Minister Frans Timmermans in The Hague, where the UN chief is to attend the third review of the Chemical Weapons Convention.

The United States and South Korea have drawn up plans for a measured tit-for-tat response to North Korean actions, which will be limited in order to prevent an escalation to broader war, The New York Times reported.

Citing unnamed US officials, the newspaper late Sunday said the new “counter-provocation” plan is calling for an immediate but proportional “response in kind” to North Korea if it decides to launch a ground attack or a missile.