South Korea's president used a speech Sunday marking the 65th anniversary of liberation from Japan to suggest a three- stage plan towards eventual reunifcation with North Korea, dpa reported.
President Lee Myung Bak also mooted a possible "reunification tax" to help pay for the astronomical possible cost of one day joining the high-tech economy of South Korea with the Stalinist peasant economy of the communist-ruled North.
Stressing that any possible reunification was a distant prospect, Lee suggested a three-stage confidence building process.
First would be a "peace community", which saw the entire Korean peninsula denuclearised.
That would be followed by an "economic community" promoting cross- border financial ties and integration, which would eventually lead to a "community of the Korean nation".
Tensions between the nuclear-armed reclusive regime in Pyongyang and the democratic South are at an all-time high, following the sinking earlier this year of a South Korean warship.
That was blamed by South Korea, and an international panel of investigation, on North Korea - a charge it denies.
"The North must never venture to carry out another provocation, nor will we tolerate it if they do so again," Lee said.
Last week North Korea fired a barrage of artillery into South Korean waters.
Worries about possible instability during any regime change following the death of 69-year old leader Kim Jong-Il to one of his sons also underpin the situation.