North Korea has announced it will scrap an agreement aimed at preventing accidental naval clashes with South Korea, amid rising tensions over the sinking of a South Korean warship.

The move is in retaliation for Seoul blaming Pyongyang for a torpedo attack that sank the Cheonan in March.

The announcement comes as the South Korean navy conducts a major anti-submarine drill.

An international probe found the Cheonan was sunk by a Northern torpedo.

North Korea has denied the allegation.

In a statement on the North Korean official news agency on Thursday, the North Korean military said the country would "completely nullify the bilateral agreement that was concluded to prevent a contingent clash in the West Sea of Korea [Yellow Sea].

SINKING OF CHEONAN - KEY DATES Image caption South Korea's president has vowed to punish those who carried out the attack March 26: Explosion hits naval corvette near disputed maritime border, killing 46 on board

May 20: Independent investigators produce proof North Korean torpedo struck vessel

May 24: South Korea declares trade with North frozen, demands apology

May 25: North Korea announces it is severing all ties with South Korean propaganda fight Korean War armistice Q&A: Cheonan sinking Timeline: North Korean attacks

"In connection with this, [we] will completely stop using international maritime ultra-short wave walkie-talkies and will immediately cut off the communication line that was opened to handle an emergency situation."

It also warned of an immediate attack if the South's navy violated the disputed Yellow Sea borderline, and that it would consider a complete block on access to a joint industrial project in the North Korean city of Kaesong.

The BBC's John Sudworth in Seoul says the announcement is another piece in the picture that is coming out of North Korea of increasing tension.

On Tuesday, North Korea announced it would sever all ties with the South.

It had also banned South Korean ships and planes from its territory - a measure it repeated in its Thursday statement.

South Korea will "resolutely" deal with the North's measures, a South Korean defence ministry official said without elaborating, according to the Associated Press news agency.

South Korea had already announced a package of measures, including a halt to most trade with North Korea. It is also seeking action via the United Nations Security Council.

The Yellow Sea was the site of deadly naval skirmishes in 1999 and 2002.

South Korean drill

Thursday's announcement came hours after 10 South Korean warships took part in an anti-submarine drill.

The South Korean exercise is one of the first visible signs of a raising of South Korea's defence posture in response to the incident, our correspondent says.

With tensions rising rapidly, the North has reacted angrily to trade and shipping sanctions announced by the South.

The two states are technically still at war after the Korean conflict ended without a peace treaty in 1953.