RUSSIA plans to sell fighter jets, intelligence-gathering systems and other high-technology equipment to North Korea in a £350m deal that is sure to alarm America.

Military sources say the sales, intended to reassert Russian influence in the region, are backed by President Vladimir Putin, who appears to have a rapport with Kim Jong Il, North Korea's eccentric dictator.

This comes after Moscow said it was to resume arms sales to Iran, contrary to an understanding with Washington.

Sources familiar with the North Korean deal say Russia is ready to sell short-range anti-

aircraft systems, SU-27 and MiG-29 fighter planes, unmanned Pchela-1 spy planes and radars that could monitor American and South Korean military movements, plus some small naval patrol vessels.

The Kremlin has agreed to send military engineers to help Pyongyang modernise its tank and armament assembly lines.

The Russians insist the equipment is only defensive, and not state-of-the-art. However, the deal has great importance for North Korea's beleaguered armed forces, accounting for a third of the military budget.

"For more than a decade Russia had hardly any relations with North Korea," said Sergei Blagovolin, a Russian expert. "That has changed with Putin. He is determined to regain influence in the region and to become a strong middleman with the West. For the Kremlin, the best way to achieve this is through arms sales."

Putin has appointed Ilya Klebanov, a deputy prime minister responsible for arms sales, as head of a committee in charge of relations with North Korea.

The deal is the latest sign of rapprochement between the Kremlin and Korea, one of the last Stalinist regimes. Kim is to visit Moscow next month after receiving Putin last year, when the two talked for twice as long as planned. Putin referred to the rarely seen dictator, whose policies have led to the starvation of more than 2m people, as "an absolutely modern man" with great understanding of world affairs.

The Russian leader also declared that Kim would scrap North Korea's missile programme, but the dictator withdrew the offer, saying it was "a joke".

The American State Department would not comment on the planned Russian sale. However, Washington views North Korea as a rogue state, and concern at Kim's missile programme is one reason for President George W Bush's determination to press ahead with the so-called "son of star wars" anti-missile shield.

"The Americans will be livid," said a Western diplomat in Moscow. "North Korea already owes the Russians $3 billion it can't pay back. Commercially this deal makes no sense. It's only about politics."