"Facilities for a nuclear test are on standby, and the possibility of a nuclear test is always open if Kim Jong-Il makes a decision," the spy chief told a parliamentary committee, according to committee chairman Shin Ki-Nam.

"There are no convincing signs or movement that suggest North Korea is now preparing to conduct a nuclear test," he said.

South Korea has in recent days stepped up monitoring of North Korean nuclear activities, while the United States has publicly warned Pyongyang against proceeding with a test.

On Saturday, a North Korean foreign ministry spokesman warned the country would take "all necessary counter-measures" in its first response to intensifying US hunts for Pyongyang-owned bank accounts overseas.

The warning came after the Choson Sinbo, a pro-Pyongyang newspaper in Japan, said North Korea could carry out a nuclear test to bolster its self-defence capability.

"They are only waiting to decide when would be the best timing," Kim Young-Soo, a political science professor at Sogang University in Seoul, told Yonhap news agency.

"People would think it would not make any sense for the North to conduct a nuclear test, but it is perfectly rational for the North because it believes it is the only way to guarantee its sovereignty and regime," Kim said.

North Korea has claimed that it already possesses nuclear weapons, while the CIA has said it believes North Korea has made several crude nuclear bombs.

Diplomatic efforts to jumpstart stalled nuclear disarmament talks have intensified since North Korea test-fired seven missiles last month, including a longe-range Taepodong-2 reportedly capable of hitting US soil.

The NIS chief said North Korea had removed all long-range missile equipment from its launch site, lowering the possibility of any new missile test.

Intelligence reports here said earlier that North Korea may have moved two long-range Taepodong-2 missiles to its Musudan-ri launch site and test-fired one of them on July 5.

"North Korea removed all of its Taepodong 2-related equipment from the test site in mid-July, so missile activities in the area have been terminated," Kim Seung-Kyu was quoted as saying.

Related Links
Learn about nuclear weapons doctrine and defense at SpaceWar.com