March 21 (Bloomberg) -- Talks on disabling North Korea's nuclear weapons program were extended for at least another day after a delay in the transfer of North Korean funds to a Chinese bank stalled the discussions, U.S. envoy Christopher Hill said.

An agreement this week between the U.S. and North Korea will release $25 million in accounts frozen in Banco Delta Asia SARL since 2005 when the U.S. Treasury Department alleged the Macau lender laundered money for Kim Jong Il's government. North Korea won't proceed with nuclear talks until the money has been transferred to an account in Bank of China in Beijing.

``The Chinese asked us to stay another day,'' Hill told reporters in the Chinese capital. ``They feel they can resolve all the issues relating to the bank accounts.''

Under a Feb. 13 six-nation accord, North Korea will receive economic aid equivalent to 50,000 tons of heavy fuel oil if it shuts its Yongbyon nuclear reactor by April 13. It will receive an additional 950,000 tons of fuel oil once it permanently disables the plant and reveals all its nuclear-related programs.

Envoys from the U.S., North Korea, China, South Korea, Japan and Russia are assessing progress on the accord and discussing steps to implement the next phase of the process.

Talks stalled yesterday after the North Korean delegation said it wouldn't move forward until it confirmed the money had been deposited in an account held by its Foreign Trade Bank at the Bank of China.

Funds Transfer

``The issue has to do with moving money from one bank account to another,'' Hill said. ``It involves filling out a lot of forms.''

The Bank of China refused to accept the transfer, China's official Xinhua News Agency reported today, citing Alexander Losyukov, Russia's envoy to the six-nation talks. The report didn't provide any other details.

The impasse over the funds won't prevent North Korea from honoring its commitments under the February accord, said Hill, the U.S. assistant secretary of state.

``It will be resolved,'' Hill said. ``My feeling is we can resolve this and get onto the 60-day schedule,'' referring to shutting the reactor and delivering the first installment of oil.

The North Koreans ``have made it clear on several occasions, including yesterday, that they will live up to the February agreement,'' Hill said earlier today.

Hill met individually with the North Korean delegation today, as well as with the envoys for Japan, South Korea and Russia, he said.

North Korean Pledge

North Korea has pledged that the $25 million will be used for humanitarian purposes and education.

The Macau Monetary Authority froze the accounts soon after the U.S. Treasury blacklisted the Banco Delta Asia in 2005, labeling it a ``money-laundering concern'' under the U.S.A. Patriot Act. The action triggered a run on the bank, leading authorities to take it over and freeze the North Korean funds.

South Korea is preparing to deliver the first installment of 50,000 tons of fuel oil, Hill said two days ago. While Japan insists on progress from North Korea in resolving the issue of abducted Japanese citizens before it helps provide aid, Hill said it will eventually contribute.

North Korea's demand to see the money before it meets its part of the bargain shows its high level of distrust toward the U.S., said Alexander May, a Beijing-based corporate lawyer affiliated with Shuang Cheng Attorneys at Law.

Lack of Trust

``They're thinking, `$25 million is not a lot of money. If you're not going to give us back our money, how can we trust you in the future,''' May said in a phone interview. ``They don't trust the U.S. and the U.S. doesn't trust them.''

Hill said the U.S. isn't involved in the transfer.

``It isn't a U.S. issue,'' he said. ``It's an issue between Macau, China and North Korea.''

Hill said he was disappointed that the funds-transfer issue had delayed progress on the talks.

``I don't want to wait around all day tomorrow while technical people wait for this to be resolved,'' he said.

To contact the reporter on this story: Heejin Koo in Beijing at hjkoo@bloomberg.net; Allen T. Cheng in Beijing at acheng13@bloomberg.net

Last Updated: March 21, 2007 11:47 EDT