North Korea has barred entry to a joint industrial complex it shares with the South for a second day, the South Korean Unification Ministry has said.
The ministry also said on Thursday that it would allow 222 South Korean workers to leave the zone through the day.
Pyongyang also repeated its threat to shut down Kaesong industrial zone, where 123 South Korean firms operate factories, if the South's government continued to insult it and worsen the situation by mentioning a possible military action against it.
|Al Jazeera's Harry Fawcett reports from Seoul
"If the South's puppet conservative gruop and its media continue bad-mouthing... we will be taking the stern measure of pulling out all of our workers from the Kaesong industrial zone," KCNA news agency quoted the North's Committee for the Peaceful Reunification of the Fatherland as saying.
Kaesong brings in $90m annually in wages to 53,000 North Korean workers and is one of the impoverished North's few sources of ready cash.
South Korean workers were banned from entering the site, located 10km inside the North, on Wednesday amid a tense standoff with Pyongyang pitted against Seoul and Washington.
Al Jazeera's Harry Fawcett, reporting from the Paju border crossing, said that the longer Kaesong remains inaccessible to Seoul, "the bigger and more serious the situation becomes".
The real test will come over the weekend when the factories in the complex begin to run low on supplies, he said.
The gates between North and South Korea will open 10 times on Thursday to allow workers to leave.
After the 222 South Korean workers leave between 10am and 5pm (01:00-08:00 GMT), another 606 workers from the South will remain in the Kaesong complex.
|Spotlight coverage of tension in Northeast Asia
The operating stability of the complex is seen as a bellwether of inter-Korean relations, and its closure would mark a clear escalation of tensions beyond all the military rhetoric.
South Korea's defence ministry said it had contingency plans, including possible military action, to ensure the safety of its citizens working in the joint industrial zone.
"We have prepared a contingency plan, including possible military action, in case of a serious situation," Defence Minister Kim Kwan-jin told ruling party MPs in a meeting on Wednesday.
Border crossings for Kaesong had until Wednesday been functioning normally despite soaring tensions in recent weeks between the North and the South.
Pyongyang has been ramping up its threats since it was hit by international sanctions following its third nuclear test
earlier this year.