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By Sangwon Yoon

Dec. 21 (Bloomberg) -- South Korean lawmakers criticized the government for failing to know about North Korean dictator Kim Jong Il’s death until it was announced two days later, putting pressure on intelligence chief Won Sei Hoon to resign.

President Lee Myung Bak’s government first heard about Kim’s Dec. 17 death when it was broadcast on North Korean state television on Dec. 19. Lee attended a party given by his staff to celebrate his birthday, wedding anniversary and election four hours before the announcement.

Won, director of South Korea’s National Intelligence Service, must be held accountable for his ignorance of Kim’s death, lawmakers said today. Lee’s defense minister quit last year amid criticism of the response to a deadly North Korean artillery attack on a South Korean island

“There have been quite a few cases where this government made diplomacy and security appointments regardless of the candidates’ expertise,” Kwon Young Se, a member of the ruling Grand National Party and chairman of the National Assembly’s intelligence committee, told CBS Radio. “Unlike other areas, one mistake in diplomacy and security can threaten the country’s existence.”

Won must resign for his “unacceptable” ignorance and poor management of the agency’s “extraordinary” budget, Park Young Sun, a member of the opposing Liberty Forward Party, said in an interview.

Alert Levels

South Korea responded to Kim’s death and the naming of his son Kim Jong Un as successor by raising the military and civilian cyber alerts one notch above their standard default levels. While the government pledged to stabilize financial markets as needed, stocks and the won rose for a second day, with the benchmark Kospi index up as much as 3.2 percent.

Former South Korean Foreign Minister Han Sung Joo said today in an interview on Bloomberg Television that North Korea is stable and a collapse of the totalitarian state unlikely. Kim Jong Un, thought to be in his late 20’s, is a “figurehead,” while his uncle Jang Song Thaek and military leader Ri Yong Ho are in charge, Han said.

“The situation is pretty much in control,” he said.

The uncertainty on the Korean peninsula comes as public discontent over Lee and his party’s administration of an economy buffeted by inflation and income disparity. The GNP lost the Seoul mayoral race in October and senior lawmakers resigned from their party leadership posts earlier this month, adding to turmoil ahead of parliamentary and presidential elections next year.

Editors: John Brinsley, Brett Miller