North Korean negotiators today sharply criticized South Korean domestic policies and insisted on a significant delay in North-South talks, aparently pushing to the distant future any possible progress in reconciliation of the two Koreas.

Lim Chun Kil, acting chief of the Pyongyang delegation at the four-month old talks here in the Demilitarized Zone, refused to resume discussions before Aug. 20, after reciting a list of alleged South Korean military atrocities. Lim, in effect, cast aside a South Korean proposal today that September deadline be set for a meeting of North and South prime ministers. The move signalled a North Korean hope that the South's domestic political troubles might increase during the interval, weakening Seoul's bargaining postion.

The North-South working-level sessions, begun in February after a proposal from the communist North, led to early hopes here of cultural and family exchanges that might reduce tensions on the Korean peninsula. Subsequent efforts by the South Korean military to take control of the government, and uprisings by students, workers and disgruntled residents of Kwangju City, appear to have persuaded the North to block any talks success that might brighten the Seoul Govrnment's tarnished image.

Last month's supression of unrest in Kwangju, the closing of universities and arrests of hundreds of dissidents have calmed the situation in the South, leading a member of the South Korean delegation, Lee Dong Bok, to predict today future improvement in negotiations. "We feel that North Korea has a substantial misconception of the real situation in South Korea," Lee said. He predicted Pyongyang would "think twice" if time went by with no more political disturbances in the South.

"They told us that although they are not happy about things that are going on in South Korea, they were determined to continue the working-level talks," Lee said of the North.

Today's ninth session of the talks, held the day before the 30th anniversary of the North Korean invasion of South Korea, lasted about two hours in the small, second floor conference room of South Korea's Freedom House complex, a few yards south of the 1954 armistice line.

Much of the time was taken up by A South Korean appeal for a meeting of prime ministers no later than September. The North Korean response ignored the request but listed several alleged atrocities inflicated on Kwangju citizens by South Korean troops.

In a passing comment, the North Korean side suggested there was no point in talking about the prime minister's meeting until South Korea selected a permanent replacement for prime minister Shin Hyon Hwack, who resigned after a military coup May 17. Retired Air Force Gen. Park Choong Hong serves as acting premier.

Lim spoke in place of North Korean delegation chief Hyon Jun Guk, who was said to be ill. He demanded that South Korea abolish its month-old nationwide martial law decree, end military rule and end the arrest and peresecution of students, workers and other supporters of democracy.

The Southern delegation responded by describing the sinking of a reported North Korean spy boat Saturday and identifying the one occupant who survived. Lim responded curtly what the story of the spy boat was "fabricated by your side for your own needs."

The South suggested the next working session be held July 8, since most meetings in the past had been at two-week intervals, but the North suggested Aug. 26 and would only knock off six days after much discussion.