Mumbai: North Korea has agreed to take steps toward nuclear disarmament, freeze the reactor, which is at the heart of its nuclear programme, and allow international inspections of the site.

Under a groundbreaking deal struck at the six-party negotiations in Beijing, Pyongyang has agreed to dismantle its nuke programme. The agreement will bring the impoverished communist state more than $300 million worth of aid.

Under the agreement, North Korea must act within 60 days, and in return it will receive 50,000-metric tons of fuel oil or economic aid of equal value. It will receive another 950,000 metric tons of fuel oil or equivalent when it takes further steps to dismantle its nuclear capabilities, including providing a complete inventory of its plutonium.

The 1-million metric tons of heavy fuel, which is used in power stations, shipping and elsewhere, would be worth around $300 million at current prices.

An extended denuclearisation deal would make North Korea eligible to receive electricity, at an estimated cost of $8.55 billion over 10 years, from South Korea.

The current deal does not involve the provision of 2,000 megawatts of electricity - equal to North Korea's current output - that South Korea pledged in a September 2005 deal reached by the six countries.

That is reserved for after the completion of denuclearisation of North Korea.

The deal, hammered out by the two Koreas, the US, Japan, Russia, and China is the first step in locating and dismantling North Korea's nuclear arms activities.