Senators concerned about North Korea's testing of a long-range ballistic missile are preparing legislation that could scuttle a key component of the cooperative ties established four years ago between the United States and North Korea.

Sen. Mitch McConnell, R-Ky., is planning to propose conditions for congressional release of $35 million to finance heavy fuel deliveries to North Korea.Under a 1994 agreement, North Korea promised to dismantle its plutonium-producing reactors and replace them with safer, light-water reactors. To help meet the north's energy needs in the interim, the United States promised to ship the North Koreans half a million tons of heavy fuel each year.

To McConnell and other lawmakers, hostile North Korean actions, symbolized most recently by a missile test Monday, disqualify Pyongyang from further U.S. assistance without severe restrictions.

The missile tested by North Korea, with a range estimated at 930 miles, overflew Japan and drew angry reactions from Tokyo and Washington.

"This development is a matter of deep concern to the United States because of its potentially destabilizing impact in Northeast Asia and beyond," State Department spokesman Lee McClenny said.

The administration contends that the 1994 agreement is the last best hope for a non-nuclear North Korea. McClenny described the pact as a "win-win" agreement for both countries.

A month ago, Secretary of State Madeleine Albright said it would be a "disaster" if the agreement were allowed to fall apart. She has expressed disappointment that other countries have failed to provide greater financial support for the fuel oil deliveries.