SEOUL, South Korea - North Korea refused to back down today on its demand for a massive increase in payments at a joint industrial park, but offered to relax border restrictions that have undermined the complex - a sign it may still want to keep the zone.

Last week, the North demanded a fourfold increase in wages for its 40,000 workers and a 3,000 percent hike in rent for the complex in its border city of Kaesong, which houses more than 100 South Korean factories and is the divided nations' last remaining joint reconciliation project.

The demands were so high that many South Koreans thought the North was intentionally forcing the companies to pull out.

In talks today at Kaesong, North Korea repeated the wage and rent demands, which were rejected by South Korea. But it also told the South that it is willing to ease restrictions on border crossings for South Korean companies operating there, Unification Ministry spokesman Chun Hae-sung said.

"I think that means the North still has interest in the project," said Kim Yong-hyun, a professor at Seoul's Dongguk University. "It would have been difficult for the North to immediately withdraw or lower its demand for wages and rent."

North Korea also did not immediately reject the South's proposal that the two sides jointly survey similar industrial zones in other countries in an effort to compromise on reasonable wage and rent levels, Chun said.

However, the North refused to free a South Korean man who was detained at the complex in March for allegedly criticizing North Korea's communist political system.

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