"We are making an official offer to North Korea to discuss ways of normalizing operations at the Kaesong Industrial Complex and want to hear their position on the matter before noon Friday," said unification ministry spokesman Kim Hyung-suk.
"If Pyongyang does not respond by the deadline, Seoul will have no choice but to take serious measures," he said.
The official said it is not appropriate to elaborate on what action can be taken if the North dismissed the latest dialogue proposal, but Seoul may take steps to recall all of its people whose living conditions have deteriorated sharply due to lack of food and other basic necessities.
The spokesman stressed the announcement is being made because the North flatly turned down a request on Wednesday for informal talks between South Korean representatives at the Kaesong Industrial District Management Committee (KIDMAC) in Kaesong and the North's General Bureau for the Special Zone Development Guidance, that manages the industrial zone.
"They not only rejected the talks proposal but did not even bother to accept the list of humanitarian requests being made," the official said. He said such actions are highly regrettable. The official pointed out that on the issue of sending basic necessities critical for the well being of the people at Kaesong, South Korea is in no position to make compromises.
Kim said the purpose of the informal talk was to allow food and medical personnel to reach the complex to alleviate the plight of the 176 South Koreans still remaining at the border town just north of the demilitarized zone that separates the two Koreas.
Seoul's latest call comes two weeks after President Park Geun-hye said there is a need for talks to settle the Kaesong dispute, and a day after policymakers announced pan-governmental action to help companies with factories at the border town deal with liquidity problems caused by lost production and the cancellation of orders.
North Korea observers, meanwhile, said that Seoul's bid to engage the North is much more detailed than previous calls for dialogue as it calls for working level government officials with actual authorities to take part in discussions.
However, they said since there is a good chance the North will not accept the dialogue proposal, South Korea will have no choice but to bring back the Kaesong workers who have no means of remaining in the North with limited food stores.
If such developments take place, the North can counter by confiscating assets of South Korean companies, which they did in the case of the Mount Kumgang resort on the east coast. Normal operations at the resort have been halted since 2008 after a North Korean guard shot and killed a South Korea woman tourist.
Kim Yong-hyun, a professor of North Korean studies at Seoul's Dongguk University said it is right for the government to recall workers who cannot live in Kaesong without food.
"If such a step is taken, it will be that much harder for normal operations to resume at the industrial park, especially since Seoul has said on numerous occasions that it views Kaesong as being a critical economic link between the two Koreas."
All operations at Kaesong came to a halt on April 9, when Pyongyang pulled out all of its 53,000 laborers who worked for the 123 South Korean companies. Six days earlier, the North barred South Korean personnel and industrial materials into the complex.
The current crisis marks the most serious challenge to the complex since it started operations in late 2004. It comes as the North has ratcheted up its war of words in recent months after detonating its third nuclear device on Feb. 12, and launching a long-range rocket late last year, in defiance of warnings by the international community.