The transfer of North Korean funds that have been frozen in a Macau bank is to begin on Thursday, Japan`s Kyodo news agency said, possibly breaking a deadlock that has stalled a nuclear disarmament deal with Pyongyang. North Korea has refused to honor a February agreement to begin shutting its Yongbyon nuclear reactor and source of material for atomic weapons until its funds at Banco Delta Asia are released through normal banking channels. A Macau government spokesman declined to comment on the report, saying, "Every minute the matter is changing ... so we can`t comment on this at the moment." Russia said on Wednesday it was poised to allow one of its banks to transfer the $25 million stuck in Banco Delta Asia, provided Washington gave written guarantees that it would not fall foul of U.S. sanctions against North Korea. The funds were blocked after the United States blacklisted Banco Delta Asia, accusing it of laundering illicit funds for Pyongyang. Banks have balked at acting as a conduit for the money to be returned to North Korea because of the stigma attached to holding Pyongyang`s assets. The funds are likely to be transferred to a Russian bank with links to North Korea via the U.S. Federal Reserve Bank and the Russian central bank, Kyodo said, citing Macau financial authorities. That would in effect allow the reclusive communist state back into the international banking system from which it is currently ostracized. The report came just ahead of a likely visit by Assistant Secretary of State Christopher Hill, the top U.S. negotiator with North Korea, to China, Japan and South Korea next week, after attending a conference in Mongolia this weekend.