Sunshine Policy failed to change North Korea: report

North Koreans take part in a parade to commemorate the 65th anniversary of the founding of the Workers' Party of Korea in Pyongyang October 10, 2010, in this picture released by North Korea's KCNA news agency on Sunday.

SEOUL (Reuters) - South Korea's peaceful "Sunshine Policy" toward North Korea failed, a government report has found, saying there have been no positive changes to Pyongyang's behavior despite a decade of mass aid and encouragement.

Aid shipped to the North during the administrations of Kim Dae-jung and Roh Moo-hyun from 1998-2008 also failed to make a difference to the lives of destitute North Koreans, said the Unification Ministry white paper, seen by Reuters on Thursday.

The policy review by current President Lee Myung-bak's government pointed to North Korea's pursuit of nuclear arms and the sinking of a South Korean navy ship in March that killed 46 sailors as key examples of Pyongyang's deceptive nature.

"The attack on the Cheonan proves that despite the qualitative growth in inter-Korea ties, North Korea has not changed," the report said.

"There are no positive changes to North Korea's position that correspond to the support and cooperation offered by us."

Kim Dae-jung won the Nobel peace prize in 2000 for his Sunshine Policy of engaging the North and initiating dialogue between the rival Koreas, which remain technically at war after signing only a truce to end their 1950-53 conflict.

Kim travelled to Pyongyang in June 2000 in the first of only two meetings between the two Koreas' leaders since the war, paving the way for warmer political ties and increasing commercial exchange.

Upon winning office in 2008, President Lee cut off aid and refused to give in to Pyongyang's demand for concessions, saying the North must first give up its nuclear programmes in return for economic aid and help to build its economy.

(Reporting by Jack Kim; Editing by Jeremy Laurence and Ron Popeski)