North Korea has reportedly closed its universities to most students and told them to start building as it ramps up a construction campaign ahead of its planned re-emergence next year as a "great and prosperous nation".

The UK ambassador to Pyongyang, Peter Hughes, told the Guardian that the almost year-long academic sacrifice was deemed necessary to reach production targets for new housing ahead of the centenary of founding president Kim Il-sung's birth.

To mark the occasion, Hughes said the government pledged to build 100,000 accommodation units in the North Korean capital, which has a chronic housing shortage.

"I think they have built maybe 10% of that ... Any country would be stretched to hit that accommodation target in two or three years," he said. "As far as we can tell they are going all out to achieve as much as they can before then."

Building work for such prestigious state events is normally carried out by the military, but construction teams are at full stretch on monuments, residential blocks and other projects.

North Korea has also recommenced work on the 105-storey Ryugong skyscraper, which was started in 1987 and was then halted during the years of starvation and economic hardship. Foreign engineers have been called in for consultation and the authorities have promised to finish the building by 2012.

There has been no mention of the mobilisation in the domestic media. Japan's Kyodo news agency has reported that all universities, except for graduating seniors and foreign students, had to cancel classes until next year.

University World News said universities would be closed for up to 10 months from 27 June while students were dispatched to farms, factories and construction sites.

The last time this is known to have happened for such a length of time was during the famines of the late 1990s. The food situation in the country remains precarious. Earlier this year, the UN launched an appeal for humanitarian aid.

Hughes said the universities remained open, but many students were being shifted to outside tasks.

"They are already out there building things. It's difficult to know exactly what," he said. "This has happened before, but for maybe a month or two. The only unusual thing is that they are out for 10 months."