NORTH KOREA IS BELIEVED to be preparing to hold a third nuclear test after reports emerged from South Korea that the North was digging tunnels at the site of the previous tests.

A local newspaper said yesterday that an unamed South Korean government officials said that several tunnels were being prepared at Punggye-ri, Reuters reports.

The already-tense relationship between North and South Korea deteriorated after a South Korean naval vessel was torpedoed in March 2010, killing all 46 on board.

The North denied any involvement in the attack, despite the South’s accusations.

In November, both sides exchanged fire over the island of Yeonpyeong along the contentious western border of the Korean peninsula. Each blamed the other for starting the assault which killed four people on the island.

Earlier this month, military representatives from North and South Korea held their first meetings since the November attack, but those talks quickly broke down.

South Korea’s President Lee Myung-bak said yesterday that his government was always open to negotiations with the North.