South Korea has increased its budget to fund North Korea-related projects this year, government data showed on Thursday, with a new president seeking closer relations due to take office in Seoul and signs of an opening from Pyongyang.
The two Koreas remain technically at war after their 1950-53 conflict ended with a truce, not a treaty, and relations plunged under South Korean President Lee Myung-bak who cut aid dramatically after the shooting of a South Korean tourist in the North in 2008.
Lee's single term ends in February when he will be replaced by Park Geun-hye, who has pledged engagement with the isolated and impoverished North, whose new leader Kim Jong-un signalled a desire for better ties in a speech on New Year's Day.
South Korea's Ministry of Unification said parliament had approved a 9.1 percent rise in the inter-Korean cooperation fund this year to 1.1 trillion won ($1.03 billion).
"The last offer for talks we made to North Korea was last summer, when the North was suffering from flood damage," said Park Soo-jin, a spokeswoman for the ministry.
"We have made the request countless times, and we can say that the offer (to talk) is still open."
The budget was higher across the board than in 2012, with more money to support exchanges between families that were divided during the Korean War as well as humanitarian aid.
However, it was still well short of the levels seen during the presidency of late former President Roh Moo-hyun, who maintained his predecessor's "sunshine-policy" engagement stance.
Both Roh and his predecessor, Kim Dae-jung, were left-of-centre presidents who sought engagement, pouring hundreds of billions of dollars of state and private aid into the North in a bid to prevent Pyongyang developing nuclear weapons.
The North pushed ahead with its nuclear programme and has conducted two tests, in 2006 and 2009, and is believed to be readying a third. Last month it successfully launched a long-range rocket that critics say is aimed at developing missile technology.
Just two weeks after the launch, Kim Jong-un, who took over after his father died in December 2011, called in his New Year's address for "an end to the division of the country" and to "remove confrontation".
Political analysts said that while welcome, the statement would not result in better ties unless North Korea abandoned its nuclear ambitions. North Korea has offered olive branches many times before, only to withdraw the offer later and resume shrill threats of all-out war.
Park, the daughter of South Korea's former ruler, Park Chung-hee, has said she will engage the North, but that it needs to drop its nuclear ambitions.