North Korea shocked South Korea in recent months when it demanded an effective quadrupling of the monthly wage for its 40,000 workers at the Kaesong industrial complex. The current average is $75; the North wanted an increase to $300.

South Korean managers said the demand threatened the profitability of 114 South Korean factories operating at Kaesong, a North Korean border town.

Then on Thursday, without explanation, North Korea scaled back its demand to 5 percent, Lee Jong-joo, a spokeswoman of the Unification Ministry in Seoul, said in a news briefing.

North Korea also did not repeat its earlier demand that South Korea increase its payments on a 50-year lease of the land at the Kaesong complex. The North wanted a new lease of $500 million, up from the current $16 million.

The Kaesong industrial park, where South Korean factories hire North Korean workers to produce goods like kitchen utensils, has served as the most prominent symbol of inter-Korean reconciliation. It also has provided the North with a much-needed source of hard currency.

North Korea began softening its stance on Kaesong last month by lifting restrictions on travel by trucks and workers between the complex and South Korea. It also released a South Korean worker at Kaesong who had been held for four and a half months on charges of denouncing the North Korean government.