THE hostel at the centre of a media storm after links to North Korea were revealed has hit back at the “false” suspicion cast upon it.

City Hostel Berlin posted on Facebook that it “regrets becoming a spectacle of international politics.”

“The impression given by the press is that City Hostel is run by the [North Korean] embassy and that it is involved in the company. City hostel is an is an old-established company in Berlin, with 50 employees,” it said, adding that rental payments would be frozen until the matter is clarified.

Earlier, the popular tourist hostel with cheap rooms, free Wi-FI and rave reviews online was revealed as leasing a property that belongs to North Korea’s government.

It means guests bunking down at the popular backpacker spot are indirectly funding Kim Jong-un’s regime which owns the property, the Washington Post reported.

The Kim regime was gifted the property from the former East German government.

But the tourist site has come under the attention of German authorities in recent days after it emerged North Korea is leasing out properties belonging to its embassy in the German capital, which includes the building that houses the hostel.

German authorities have asked the hostel operator to cancel his lease, in an effort to tighten economic sanctions on North Korea and help thwart the country’s nuclear program.

The government said as the site is North Korean embassy property the hostel has been leased in violation of UN rules.

Germany’s Foreign Ministry on Tuesday confirmed a report from Germany’s Sueddeutsche Zeitung paper and NDR and WRD broadcasters that the operations were to be soon shut down.

Deputy foreign minister Markus Ederer said in a statement that Germany “needs to increase pressure to bring North Korea back to the negotiating table.”

Foreign Ministry spokesman Martin Schäfer told German news site The Local that any kind of commercial activity on the site of the embassy or in relation to the embassy is prohibited.

According to public broadcaster ARD, the tenants reportedly pay 38,000 euros, or $56,000 a month in rent to the DPRK.

Both the hostel owner and the North Korean Embassy in Berlin have been notified that the rental agreement violates international law.

However it remains unclear exactly when the hostel will have to shut down and still appears to be accepting bookings.

The building’s ownership came under increased scrutiny after a UN security resolution adopted last November which states “all Member States shall prohibit the DPRK from using real property that it owns or leases in their territory for any purpose other than diplomatic or consular activities.”

RAVE REVIEWS

The hostel has rave reviews on Trip Advisor with those who have stayed praising it for its convenient location, cleanliness and affordability.

“Prices are very reasonable, rooms are good. Beds, towels and other facilities really nice,” one review reads.

“They have locker facilities also and the people standing in reception are very friendly and they speak very good English.”

Others praise its modern facilities and its cheap breakfasts.

The hostel itself promotes itself as being cheap accommodation in the heart of the city centre and only 1.2km from the famous Brandenburg Gate and Checkpoint Charlie.

debra.killalea@news.com.au