North Korea today cancelled an invitation to UN chief Ban Ki-moon to visit an industrial zone inside the isolated state, in an abrupt move that Ban deplored as "deeply regrettable".

The decision comes after Ban this week urged North Korea to avoid any actions that might escalate military tensions, after it successfully test-fired a submarine-launched ballistic missile (SLBM).

Ban said that via "diplomatic channels", North Korea had rescinded its invitation to the Kaesong zone, which is a key earner for the cash-strapped state but a perennial source of tension with South Korea.

"No explanation was given for this last-minute change," the UN chief, a former foreign minister of South Korea, told a forum in Seoul.

"This decision by Pyongyang is deeply regrettable," Ban said."However, I as the secretary-general of the United Nations, will not spare any efforts to encourage the DPRK (North Korea) to work with the international community for peace and stability on the Korean peninsula and beyond."

South Korea's Unification Ministry also expressed "regret" at the reversal."The government again urges North Korea to turn away from the path for isolation and to grasp the hands reached out by the United Nations and international community for dialogue and reconciliation," ministry spokesman Lim Byeong-Cheol told reporters.

Ban had planned to travel Thursday to the industrial estate, a joint enterprise between Pyongyang and Seoul which lies 10 kilometres (six miles) over the border inside North Korea. It hosts around 120 South Korean firms employing some 53,000 North Korean workers. Had the visit gone ahead, Ban would have become the first UN secretary-general to set foot in the communist state for more than 20 years, since Boutros Boutros-Ghali in 1993. Unlike Boutros-Ghali, who met the North's then-leader Kim Il-Sung to discuss tensions over its nuclear ambitions, Ban was not expected to have any high-level talks during his brief visit to Kaesong.