SEOUL, Jan. 23 (Yonhap) -- In another reflection of frayed inter-Korean relations, South Korea last year used the smallest amount of funds earmarked for exchanges with North Korea since the sides held their first summit in 2000, the Unification Ministry said Sunday.

   The ministry, the main South Korean government arm handling affairs involving North Korea, spent 86.25 billion won (US$76 million), or 7.7 percent of the 1.12 trillion won designated as the "South-North Cooperation Fund," officials said this week.

   The fund was created in 1991 to support humanitarian and economic exchanges between the divided Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce.

   Last year's spending was the smallest since 2000 when the sides held their landmark summit talks and agreed on a wide range of cooperation projects as part of their reconciliation efforts.

   But the cross-border ties deteriorated to the worst level in more than a decade when the North bombarded a South Korean island and was also found responsible for sinking a warship last year.

   South Korea has suspended humanitarian aid and cross-border trade in retaliation, pressing North Korea to apologize if the impoverished communist country seeks to restore their relations.

   The cooperation fund's implementation rate had ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after a conservative government took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

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