Still no thaw in relations over Icelandic bank row

ICELANDIC negotiators may return home today from London if no new meetings are called with British officials over the Icesave debt crisis, Icelandic Radio quoted a finance ministry spokesman as saying.

Officials from the two countries met in London on Saturday but the radio station said no formal meetings took place yesterday, although the negotiating teams had been in contact.

Iceland is at loggerheads with Britain and the Netherlands over terms for repaying them more than $5 bn (£3.3bn).

Iceland wants a new deal to avoid a referendum on March 6 on a previous agreement which the island's voters are almost certain to reject, undermining the government's credibility and delaying access to vital economic aid.

The two countries compensated British and Dutch depositors over the 2008 collapse of Iceland’s Landsbanki, which had offered high-interest online accounts under the Icesave brand. Now they want their money back from Iceland.