'We will respond" ... President Barack Obama says the United States will respond 'proportionally, and in a place and time that we choose' against North Korea for the Sony hacks. Photo: AFP

US President Barack Obama moved to prevent US anger at North Korea from spiraling out of control on Sunday by saying the massive hacking of Sony Pictures was not an act of war but instead was cyber-vandalism.

Washington's long-standing dispute with North Korea, which for years has centered on its nuclear weapons program, has entered new territory with the accusation that Pyongyang carried out an assault on a major Hollywood entertainment company.

Obama and his advisers are weighing a range of options on how to punish North Korea for the attack after the FBI concluded on Friday that Pyongyang was responsible. North Korea has denied it was to blame.

The hack attack and subsequent threats of violence against theatres showing the film prompted Sony to withdraw a comedy, "The Interview," prepared for release to cinemas during the holiday season. The movie depicts the fictional assassination of North Korean leader Kim Jong-un.

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Obama and free speech advocates criticised the studio's decision, but Sony Pictures Entertainment CEO Michael Lynton defended it.

Obama put the hack in the context of a crime.

"No, I don't think it was an act of war," he told CNN's "State of the Union with Candy Crowley" show, which was taped on Friday and aired on Sunday.

"I think it was an act of cyber vandalism that was very costly, very expensive. We take it very seriously. We will respond proportionately."

Obama said one option was to return North Korea to the US list of state sponsors of terrorism, from which Pyongyang was removed six years ago.

At a time when so much information is digitised, "both state and non-state actors are going to have the capacity to disrupt our lives in all sorts of ways," he said.

"We have to do a much better job of guarding against that. We have to treat it like we would treat, you know, the incidence of crime, you know, in our countries."

Republican Senator John McCain disagreed with Obama, telling CNN the attack was the manifestation of a new kind of warfare.

Republican Representative Mike Rogers, chairman of the House Intelligence Committee, criticised Obama for embarking on a two-week vacation in Hawaii on Friday without responding to the attack.

"You've just limited your ability to do something," Rogers told Fox News Sunday.

"I would argue you're going to have to ramp up sanctions. It needs to be very serious. Remember - a nation-state was threatening violence."

North Korea has been subjected to US sanctions for more than 50 years, but they have had little effect on its human rights policies or its development of nuclear weapons. Experts say the nation has become expert in hiding its often criminal money-raising activities, largely avoiding traditional banks.

North Korea said on Saturday that US accusations that it was involved in the Sony attack were "groundless slander" and that it wanted a joint investigation into the incident with the United States. It said it could prove it had nothing to do with the attack.

The White House said on Saturday it remained confident North Korea was responsible.

The FBI said Pyongyang's actions fell "outside the bounds of acceptable state behavior."

It was the first time the United States had directly accused another country of a cyberattack of such magnitude on American soil and set up the possibility of a new confrontation between longtime foes Washington and Pyongyang.

US experts say Obama's options in punishing North Korea could include cyber-retaliation, financial sanctions, criminal indictments against individuals implicated in the attack or even a boost in US military support to South Korea, which is still technically at war with the North.

But the effect of any response would be limited, given North Korea's isolation and the heavy sanctioned already in place for its nuclear program.