A foreign ministry spokesman said officials would meet Tuesday with a team of UN inspectors who are flying in to discuss the shutdown and sealing of the Yongbyon atomic reactor.

He said Pyongyang had finally received 20 to 25 million dollars which had been frozen in a Macau bank since 2005 after US allegations of counterfeiting and money laundering.

The assets, he said in a statement, would be used "for improving the lives of our people and other humanitarian purposes as planned."

The statement -- Pyongyang's first official acknowledgement that the funds row was settled -- came as the four-strong team of inspectors from the International Atomic Energy Agency (IAEA) landed in Beijing en route for Pyongyang.

"We have to make sure that the reactor should be shut down at Yongbyon," team leader Olli Heinonen said on what will be the watchdog's first mission to the communist regime since its inspectors were kicked out in late 2002.

"The facility should be shut down and sealed. So this is the next step on this long trip," he added.

The disarmament deal was struck in February with China, Japan, Russia, South Korea and the United States after the North last year tested a nuclear device for the first time, triggering worldwide condemnation and UN sanctions.

Under its terms, Pyongyang pledged to disable its nuclear programmes under UN supervision in exchange for up to one million tonnes of heavy fuel oil or equivalent energy aid as well as diplomatic concessions.

The US agreed in March to give the money back but could not get it quickly transferred due to a myriad of complications, until Russia finally stepped in to ease the flow.

The money has finally been wired through, "thus settling the controversial issue," the North's foreign ministry official said in remarks carried by the state news agency KCNA.

From Tuesday, North Korea will talk with the IAEA delegation "on the suspension of the operations of nuclear facilities, its verification and monitoring," he said.

He said the funds dispute became a sticking point not because of the amount, but because it was "a vivid manifestation of the hostile (US) policy" toward the regime.

"Now that the issue of de-freezing the funds has been settled, the DPRK too will start implementing the February 13 agreement on the principle of 'action for action'," he added, using the North's official name.

The IAEA team's five-day mission in North Korea follows a landmark visit to Pyongyang last week by chief US nuclear envoy Christopher Hill, the most senior US official to travel there in nearly five years.

Hill said later that he expected the reactor to be shut within three weeks and that foreign ministers from the six nations involved in the disarmament process would meet in July to discuss the next steps.