SEOUL, South Korea (AP) — South Korea said yesterday that it will shut down a joint industrial park with North Korea in response to its recent rocket launch, accusing the North of using hard currency from the park to develop its nuclear and missile programmes.

The decision to end operations at the industrial complex in the North Korean border city of Kaesong, the last major cooperation project between the rival countries, comes after North Korea on Sunday launched a long-range rocket considered by other nations to be a banned missile technology test.

By closing the complex, South Korean President Park Geun-hye has done something her conservative predecessor resisted, even after two attacks blamed on North Korea killed 50 South Koreans in 2010. It is among the strongest punitive measures available to her.

South Korean Unification Minister Hong Yong-pyo said at a news conference that the suspension of operations at the park would stop the North from using currency earned there to develop nuclear and missile technology.

The park, which started producing goods in 2004, has provided 616 billion won (US$560 million) of cash to impoverished North Korea, Hong said.

“It appears that such funds have not been used to pave the way to peace as the international community had hoped, but rather to upgrade its nuclear weapons and long-range missiles,” he said at the televised briefing.

The Unification Ministry, which is responsible for relations with North Korea, said in a statement that the Government had “decided to completely shut down” the park. It notified North Korean authorities of the decision and asked them to help ensure the safe return of South Korean citizens from Kaesong.

There was no immediate reaction to the move from North Korea.

The United States supported the move by its close ally, and said it was considering its own, unspecified “unilateral measures” to punish Pyongyang for its recent nuclear test and rocket launch, even as the UN Security Council deliberates imposing more multilateral sanctions.

South Korea’s Government will provide financial compensation to companies that operate at the park, the Finance Ministry said.

South Korean businesses with factories at the park reacted with a mixture of disappointment and anger. In a statement the association of South Korean companies in Kaesong denounced the Government’s decision as “entirely incomprehensible and unjust.”

Lee Eun Haeng, chairman of Ilsung Leports, which produces fashion goods at the park, said the companies had become “victims” of a political situation.