"North Korea is making preparations of how to counter economic sanctions and it could repel them with military force," Kim Dae-jung, who met North Korean leader Kim Jong Il in 2000 in the only summit between the Koreas, told The Associated Press in an interview.
The U.N. Security Council unanimously approved a resolution earlier this month sanctioning Pyongyang for its Oct. 9 nuclear test.
The resolution rules out military action against North Korea but calls on all countries to inspect cargo to and from North Korea to prevent illegal trafficking in weapons of mass destruction or ballistic missiles.
Seoul has been lukewarm about joining U.S.-led efforts to deter North Korea's trade in missile and nuclear technology out of concerns of possible clashes with North Korea along their sea or land borders.
"North Korea could resist with force if its ships are inspected," Kim said, adding the North also could "make some trouble" on the frontier separating the rival Koreas.
"We cannot know for sure now how this kind of small conflict could escalate in the future," he said.
Kim indicated his opposition to pressuring the North, and reiterated his stance that Washington and Pyongyang should hold talks and make concessions to resolve the North's nuclear standoff.
Kim called on Washington to enter a "give-and-take" dialogue with the North, which should totally dismantle its nuclear program in exchange for security guarantees and the lifting of economic sanctions.
Kim is the architect of the South's "sunshine policy" of engagement with the North, for which he won the 2000 Nobel Peace Prize. But he conceded Saturday that some changes could be made to key projects to ensure no money is diverted to weapons programs.
For example, North Korean workers at a joint industrial zone could be paid directly, and payments for a tourism venture could be made with goods rather than cash, Kim said. He added that monitoring for food aid could also be strengthened.
"The sunshine policy was a success but in implementing such details there can be changes along the way," Kim said.
However, he blamed the lack of further progress in reconciliation between the Koreas on the United States.
"The reason why the 'sunshine policy' could not be fully be completed and was not a full success was because of stalled U.S.-North Korean relations," Kim said.