Main opposition Democratic Party of Korea Chairman Lee Jae-myung speaks during a general meeting of lawmakers at the National Assembly, Oct. 25. Yonhap

Opposition leader Lee Jae-myung blasted the government Wednesday over its handling of a debt default linked to the Legoland theme park project, warning it could lead to an economic disaster similar to the 1997 Asian financial crisis.

The construction project in the eastern province of Gangwon has rocked the local corporate debt market after a municipal government-linked company missed a debt payment of 205 billion won ($143 million) and was listed bankrupt.

Despite Gangwon Province's pledge to ensure the debt payment by the end of January 2023, market jitters have not subsided with worries growing over a credit crunch that could make it tougher for businesses to borrow money.

Financial authorities have taken the issue seriously, pledging over the weekend to pump in at least 50 trillion won to calm market jitters. The government also said it will activate the bond market stabilization fund and purchase corporate bonds and commercial papers.

Democratic Party leader Lee lashed out at the government for failing to prevent and cope with the default.

"Gov. Kim Jin-tae who pushed ahead with this kind of ridiculous policy is problematic, but it's truly surprising that the government, which should have taken care of the issue, neglected it and didn't do anything until things became serious," Lee said.

"It's a typical case that bares the government's three 'No's. No competence, no responsibility and no countermeasure."

The DPK leader, who has protested intensifying prosecution probes against corruption allegations involving him, lashed out at the state auditor, the prosecution and police for failing to investigate the Gangwon government.

"Are they again turning a blind eye since they are on the same side?" the former Gyeonggi Province governor said, claiming that he would have been immediately questioned for power abuse allegations if he were in the same situation.

"The government's situation is too similar to that of the 1997 Asian financial crisis," he said. "The capital market is fretting about another financial crisis," he said, calling on the government and the ruling party to better respond to the Legoland default. (Yonhap)