Seoul: A news report says that North Korea has scrapped two key spy agencies and incorporated them into a defence ministry-run body.

Yonhap news agency quotes unnamed sources as saying on Sunday that the reshuffling was apparently aimed at streamlining the government and giving the military more authority.

South Korea's Unification Ministry and the National Intelligence Service said they cannot confirm the Yonhap report.

North Korean leader Kim Jong Il has been devoting much of the country's scarce resources to his 1.2 million-member military under his "songun," or "military-first" policy.