SEOUL, Sept 11 (Reuters) - South Korea's president convened an emergency meeting of his cabinet to prepare for possible changes in North Korea after speculation its leader Kim Jong-il had suffered a stroke, an official said on Thursday.

Kim, 66, has led Communist North Korea for 14 years under which the reclusive country has seen it economy shrink, its ballistic missile arsenal swell and U.N. sanctions imposed due to its nuclear programme and first atomic test two years ago.

"We should have thorough and precise readiness so we can respond to any situation without confusion," President Lee Myung-bak was quoted as saying in a statement from the spokesman of the presidential Blue House. The meeting was late on Wednesday.

"There was a report that Chairman Kim is recovering from a stroke in the brain circulatory system and does not appear to be in a serious condition," a Blue House spokesman said.

U.S. and South Korean intelligence officials said earlier that Kim had suffered a stroke. The South's intelligence said Kim was recovering well, while North Korean officials reportedly said there was nothing wrong with their leader.

The statement said the South has spotted no unusual troop movements in the North but Lee had asked his government to step up readiness plans for possible contingencies.

Kim's death would create huge uncertainty over leadership in a country whose deep distrust of the outside world is backed by one of the globe's largest standing armies and which probably has atomic weapons.

The North has threatened to turn its wealthy neighbour in the south to dust and considers Japan and the United States as mortal enemies.

His illness comes as the North appears to be backing away from an international nuclear disarmament deal and analysts said progress would almost certainly be scuttled if there was a leadership struggle in the North.

Kim's health and possible successor are two of Pyongyang's most closely guarded secrets. [ID:nSEO276119]

South Korea said in a 2006 intelligence report that when Kim died, it expected the North Korean government to lapse into a brief coma and then hunker down with top military officials battling for power, perhaps in partnership with one of Kim's three known sons. [ID:nSEO300113]. (Reporting by Jack Kim and Jon Herskovitz; Editing by Nick Macfie)

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