The Democratic People's Republic of Korea (DPRK) has proposed the removal of the Republic of Korea's facilities from DPRK's resort of Mount Kumgang, a key symbol of cooperation that Pyongyang recently criticized as "shabby" and "capitalist," ROK officials said on Friday.

In the latest sign of the neighbors' cooling ties, DPRK leader Kim Jong Un has urged that ROK's "backward" and "hotchpotch" facilities at the infrequently-used resort be taken down and rebuilt, DPRK's KCNA news agency said.

On Friday, the DPRK sent notices to ROK's Unification Ministry, which handles issues between the two sides, and Hyundai Group, whose affiliate Hyundai Asan Corp built resort facilities, asking for the demolition and seeking discussion through the exchange of documents, the ministry said.

"The government will prepare a creative solution to the Mt Kumgang tourism project" by protecting the property rights of the ROK people while considering the international situation, inter-Korean agreements and domestic consensus, Unification Ministry spokesman Lee Sang-min said in a briefing.

ROK: Tour to DPRK's Mount Kumgang not subject to UN sanctions

Any withdrawal of ROK relics from the scenic resort would be another setback for President Moon Jae-in's campaign to end confrontation between the old foes, including efforts to resume stalled business initiatives.

"The North (DPRK) asking the South (ROK) to discuss the issue 'in writing' means they don't even want to talk about other things," said Cheong Seong-chang, a senior fellow at ROK's Sejong Institute.

Mt Kumgang is on ROK's eastern coast, just beyond the demilitarized zone separating the two countries. It was one of two major inter-Korean economic projects, along with the Kaesong industrial zone, and an important token of rapprochement during decades of hostilities following the 1950-53 Korean War.

Kim, on a visit to a nearby province, hailed a new tourist resort being built there as a striking contrast to Mt Kumgang's "architecture of capitalist businesses targeting profit-making from roughly built buildings," KCNA said.

However, ROK's Unification Minister Kim Yeon-chul said he did not see DPRK's proposal as a bid to exclude the ROK because Kim Jong Un had said he would welcome the ROK people if it were properly rebuilt, the Yonhap news agency said.

Tourism has become increasingly key to Kim's policy of "self-reliant" economic growth, as it is not directly subject to UN sanctions aimed at curbing DPRK's nuclear programs, though they ban the transfer of bulk cash to Pyongyang.