SEOUL, South Korea (AP) - North Korea ordered a sharp cut in the number of South Koreans permitted to stay in a joint industrial complex in its border city of Kaesong amid worsening relations between the two Koreas, Seoul’s Unification Ministry said Monday.

The North demanded that the number of South Koreans allowed to stay without restriction in the sprawling factory park be limited to 880 - a fifth of the 4,200 people with permits to travel to or stay in the enclave.

The drastic cutback at the complex - the last remaining reconciliation project left between the two countries - is one of a series of measures the communist nation is taking in anger over Seoul’s hard-line stance toward the regime.

The North’s decision is expected to affect 88 South Korean companies that run factories in Kaesong using North Korean labor. Some 35,000 North Koreans work at the business complex.

"Of course it’s a nuisance. We could leave the complex at our convenience, and now that they’re restricting our entry, I foresee some difficulties arising," Ahn Young-su, 51, a South Korean manager in Kaesong, said at a border checkpoint.

Starting Monday, Pyongyang also suspended tours to the ancient border city near the complex as well as a cross-border train service. A third major reconciliation project, a tour to the North’s scenic Diamond Mountain, has been suspended since a North Korean soldier fatally shot a South Korean tourist there in July.

"It is very regrettable that North Korea has imposed restrictions on border crossings," Unification Ministry spokesman Kim Ho-nyeon said. "The North’s measure should be immediately withdrawn."

The spokesman also repeated Seoul’s long-running call on Pyongyang to agree to dialogue.

Tensions have been high since conservative South Korean President Lee Myung-bak took office in February with a pledge to seek a tougher approach to Pyongyang than his liberal predecessors.

Lee has questioned implementing key accords his predecessors struck with the North’s Kim Jong Il that call for providing aid to the North without condition. That and other moves by Seoul, including its recent sponsorship of a U.N. resolution denouncing Pyongyang’s human rights record, have enraged the North.

Pyongyang accuses Lee of seeking confrontation with the North, branding him a "traitor," "a pro-American sycophant" and "despicable human scum."