Outgoing South Korean President Kim Dae-jung has apologised to the nation for the scandal surrounding the payment of money to North Korea ahead of the historic summit with Pyongyang in June 2000.

As a person, I feel miserable and my heart is aching Kim Dae-jung

In a televised speech on Friday the president denied that he or his government had made any payments.

But he admitted that the Hyundai business group had transferred $186m to Pyongyang with his government's knowledge shortly before the summit.

Mr Kim won a Nobel Peace Prize for his efforts to bring reconciliation to the divided peninsula, which included a visit to Pyongyang and the first meeting between the leaders of the two Koreas.

'National interest'

The outgoing president apologised for the deep concern he had caused the public and said he felt miserable.

I earnestly hope that our people will understand my innermost feelings about the thing I did Kim Dae-jung

"Since it has become an open, public issue, I think the government should disclose details and that I as the president should take responsibility," he said.

President Kim said Hyundai paid the money so it could pursue seven development projects in the North, including railways, power generation, communications, tourism and an industrial park.

Mr Kim added that he believed that was in the national interest, even though it was against the law.

"I take responsibility for this situation. But I earnestly hope that our people will understand my innermost feelings about the thing I did, out of my desire to promote peace and our national interest," he said.

Investigators found that the money paid by Hyundai was borrowed from a state-run bank in South Korea.

Mr Kim leaves office at the end of this month.

His successor, Roh Moo-hyun, is also a strong advocate of reconciliation with the North.