BEIJING, June 25 (Reuters) - The chief inspector of the United Nation's nuclear watchdog arrived in China on Monday on his way to North Korea, where he hopes to arrange the return of an IAEA team to monitor Pyongyang's promised reactor shutdown.

North Korea agreed in February to mothball its Yongbyon reactor, the centrepiece of its nuclear programme and source of weapons-grade plutonium.

In exchange, impoverished North Korea will receive fuel aid and other benefits, including steps to lift trade sanctions and its removal from a U.S. list of state sponsors of terrorism.

"Now we are going to negotiate how to verify and make sure the reactor will be shut down and sealed, so this is the next step on this long trip," Olli Heinonen, deputy director in charge of global nuclear safeguards at the International Atomic Energy Agency (IAEA), told reporters at Beijing's international airport.

North Korea ejected IAEA inspectors in December 2002 and left the nuclear Non-Proliferation Treaty shortly afterwards.

In 2005, North Korea announced it had nuclear weapons. Last year, the country test-detonated its first nuclear device, drawing widespread condemnation and U.N. financial and arms sanctions.

"POSITIVE SIGNALS"

Asked if his four-member team would visit the Yongbyon reactor, Heinonen said: "Let's see when we get there how the arrangements are."

The team is due to arrive in Pyongyang on Tuesday and is expected to stay for five days in the country. Heinonen said earlier that negotiations would last two to three days.

Heinonen was also asked how long it might take to shut the nuclear reactor.

"It's pretty much up to them how they shut it down. It depends on whether they have done preparations or not," he said. "We will find out once we get there."

North Korea had refused to honour the February agreement until the release of $25 million at Macau's Banco Delta Asia, frozen after the United States blacklisted the bank, accusing it of laundering illicit funds for the reclusive country.

On June 14, the government of Chinese-controlled Macau said the money had been released and Moscow has since confirmed that the funds were transferred to a Russian bank.

U.S. envoy Christopher Hill, who made a surprise overnight trip to the East Asian state last week, said in Tokyo on Saturday that North Korea would shut down Yongbyon very soon, probably within three weeks.

U.S. Secretary of State Condoleezza Rice said she expected North Korea to live up to its pledge, but added it was unclear how long this would take due to the technical issues involved.

"There are positive signals, at this point, from the North Koreans about their intention to carry forward on their obligations. We'll see," Rice told reporters on Sunday as she flew to Paris. (Additional reporting by Mark Chisholm)

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