Seoul: Baffled over North Korea's threat to strip a Seoul firm of its exclusive right to run tours to a mountain resort in the Communist state (North Korea), South Korea criticized the move calling it illegal and unacceptable on Monday.

North Korea said on Sunday that it may deprive Hyundai Asan of its monopoly over tours to scenic Mount Kumgang, where the firm has invested millions of dollars and has a 50-year accord reached in 2000.

"The North's claim... is in violation of agreements made at business and government levels as well as international customs," said Chun Hae-Sung, a spokesman for the South's Unification Ministry.

He added, “The decision is absolutely illegal, illegitimate and unacceptable and should be withdrawn immediately.”

North Korea warned that it may reach a deal with an unspecified "overseas businessman" to replace Hyundai Asan.

Earlier the tours by South Koreans, once a significant source of hard currency for the impoverished state, North Korea, began in 1998. They ground to a halt in 2008 after a North Korean soldier shot dead a Seoul housewife who had strayed into a restricted military zone.

South Korea has said that it will not resume the tours until the North allows an on-site investigation into the shooting and gives firm safety guarantees.

The very demand is not being accepted by Pyongyang.