Foreign companies will be able to invest in the Kaesong industrial park in North Korea from next month as the South Korean government tries to capitalise on emerging optimism about the nuclear crisis and promote greater co-operation with the North.

Six-party talks on the North’s nuclear programme are to resume today in Beijing. Meanwhile, the South’s unification ministry is preparing investment incentives to encourage foreign manufacturers in particular to open factories in the industrial park on the northern side of the demilitarised zone separating the two Koreas, and take advantage of cheap North Korean labour.