SEOUL (Reuters) - More than a thousand South Koreans sued the government on Thursday for compensation for forced labor for Japanese firms during World War Two in a fresh twist to one of several historical disputes souring ties between the two countries.

Seoul and Tokyo have been struggling to contain fallout from a landmark ruling in October by South Korea’s Supreme Court that Japan’s Nippon Steel & Sumitomo Metal Corp must compensate four South Korean forced laborers as their rights to reparations were not terminated by a 1965 treaty that normalized diplomatic ties.

Under the deal, South Korea received a package of $300 million in economic aid and $500 million in loans from Japan in exchange for Seoul considering all pre-treaty compensation issues settled. And the money was spent to rebuild its infrastructure and economy ravaged by the 1950-53 Korean War.

Similar verdicts in favor of the forced laborers followed suit, and South Korean President Moon Jae-in said last week that he respects the decision upholding their individual rights to compensation.

A group of 1,103 former forced laborers and their families said it had filed a lawsuit demanding the South Korean government provide 100 million won ($88,500) to each of them in compensation because it had received funds from Japan.

The case adds to three suits previously raised since last year by a total of 283 victims and their families.

The foreign ministry declined to comment.

“The two governments signed the 1965 deal without asking a single forced laborer,” Choi Yong-sang, who leads a victims’ organization and the latest suit, told reporters.

The two countries share a bitter history that includes Japan’s 1910-45 colonization of the Korean peninsula, the forced mobilization of labor at Japanese companies and the use of comfort women, Japan’s euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.

The rows over wartime history have long been a hurdle for relations between the neighbors at a time when there is a need for concerted efforts to dismantle North Korea’s nuclear and missile program.

More than 220,000 South Koreans have registered with the government as former forced labors since the issue came to a head following a 2005 release of some diplomatic cables in the run-up to the 1965 pact.

The government had offered “condolence funds” of up to 20 million won to the families of nearly 80,000 of them who died overseas, went missing or were injured, but the remainder, including the 1,103, did not receive any money, they said.

“We’re not saying the $300 million aid was ours, but we believe it had the nature of compensation for forced labor and the government used it,” said Park Jong-gang, a lawyer for the plaintiffs, citing undisclosed diplomatic cables.

Several surviving victims and around 300 members of bereaved families gathered at the conference, some donning traditional white hats saying “compensation” and others holding a banner reading “the government must compensate”.

There are now about seven or eight survivors nationwide, according to the group.

Lee Won-soo, a 89-year-old survivor who said he worked at Mitsubishi Heavy Industries Ltd at age 16, said he had almost given up on receiving an apology from Japan and any compensation.

“I thought I was going to die, crushed and left alone, as no one had ever bothered to comfort me for my suffering under Japanese rule,” Lee told reporters.

“But now I believe the world won’t let it pass.”