North Korean leader Kim Jong Il is more impaired from the stroke he apparently suffered last month than reports from the region suggest, and the United States and China are holding talks about what to do if the government in Pyongyang collapses, FOX News has learned.

A senior Bush administration official says that although Kim may not be close to death, the U.S. does not accept reports from South Korea that he’s on his way to a rapid recovery.

The official told FOX News the United States is naturally engaging the Chinese about what to do if there is ensuing instability in North Korea.

There is no logical successor to Kim. He has not been grooming one of his sons to replace him, as Kim’s father, Kim Il Sung, groomed him.

The official told FOX News there are no signs of instability in North Korea now, but the likelihood of a smooth transition of power in that country is not high.

The source said the Chinese are reluctant to admit the discussions publicly, because of their close relationship with North Korea.

The official said Kim obviously is physically impaired or he’d have taken part in this week celebration marking the nation's 60th anniversary. The ceremony contained some production elements to obscure the fact that Kim wasn’t there.

Media reports Thursday said Kim’s condition has improved but that he could have partial paralysis on one side.

With that degree of physical impairment, doctors say, there is often some mental impairment. And if he were incapacitated, it could have serious implications for international negotiation on the country’s nuclear disarmament.

The Bush official pointed to two recent decisions in the six-party talks that both need Kim’s approval and seem to have been put on hold: North Korea’s release of a verification protocol on its nuclear disarmament, and an agreement with the Japanese on abductions.

The official called the talks with the Chinese about as sensitive as they come. He said it would be irresponsible, given North Korea’s nuclear weapons, not to be holding them.

The Associated Press contributed to this report.