The Swiss luxury hotel chain Kempinski is dropping plans to open a huge pyramid-shaped hotel that has stood half-built for decades in North Korea amid escalating tensions on the Korean peninsula.

“Kempinski Hotels confirms that KEY International, its joint venture partner in China with Beijing Tourism Group (BTG), had initial discussions to operate a hotel in Pyongyang, North Korea,” Brigitte Hohl Taylor, a spokeswoman told AFP in an email.

“However no agreement has been signed since market entry is not currently possible,” she said, adding in a phone conversation that the discussions had been halted.

In November, the Geneva-based luxury hotel chain said it hoped to open Pyongyang’s 105-storey Ryugyong Hotel in July or August this year.

But on Sunday, the South China Morning Post reported that the Swiss company had decided to ditch the project amid the increasingly bellicose rhetoric from the North Korean regime.

Former North Korean leader Kim Jong-Il, who died in December 2011, reportedly ordered construction of the Ryugyong hotel in 1987, initially with skills and capital from a French company.