Icelands president demands that Gordon Brown intervenes in payback row

By Richard Tyler Published: 12:29PM GMT 06 March 2010

Iceland"s referendum has formalised a open recoil opposite the debt amends conditions

Last embankment talks in between the dual countries and Netherlands were dangling last night forward of a referendum today, that was triggered by boss Olafur Grimsson in Jan when he refused to authorize the remuneration deal.

Polls indicate that as majority as three-quarters of Icelanders will opinion "No to profitable �2.3bn to Britain and �1.2bn to the Dutch.

Icelanders reject plan to pay off �3.5bn Iceland"s opinion gives UK small joy Icelanders reject payback Google faces $15 million legal case for releasing blogger report in indication row Iceland: what nauseous secrets are watchful to be unprotected in the meltdown? Internet privacy: Government warns email providers over targeted online promotion

The opinion will formalise a open recoil that has turn Icelands ultimate stumbling retard on the formidable highway out of a low recession, jeopardising the credit rating, entrance to bail-out income from the International Monetary Fund and entrance to the European Union.

Britain and the Netherlands last week offering improved conditions together with a floating seductiveness rate on the debt and 2.75pc, that represents a poignant cut on the 5.5pc underneath the strange understanding beaten out at the finish of last year.

But Iceland walked out on talks in London, branch down what the UK described as the "best and last offer".

Speaking to the BBC today, Mr Grimsson said: "What is critical following this referendum and in the light of the result is that the care of Britain and the Netherlands, generally Gordon Brown, will right away take the make a difference in to his own hands, that he has not done.

"He [should] show, in the light of the swell that has been done recently, a identical sort of statesmanship as he did a year ago on the tellurian monetary crisis.

"All the domestic parties in Iceland and the strenuous infancy of the people have pronounced they will accept a satisfactory deal. If a new agreement is fair, I dont think there will be a need for a [second] referendum."

Mr Grimsson insisted that Iceland was not perplexing to evasion the share of shortcoming for the income lost when Icesave collapsed in 2008.

"There is concord in this nation that we will pay off what is homogeneous to 20,000 euros per depositor," he said.

But he denied that Iceland should take solitary responsibility: "According to the European monetary regulations underneath that the Icelandic banks operated, it was a common shortcoming of the regulatory authorities in Britain and Netherlands as well as in Iceland."

Although the International Monetary Fund has never categorically related smoothness of a $4.6bn loan to the reaching of an Icesave deal, it is continuous to Iceland repaying the general debt - the months taken to reach the strange Icesave understanding were obliged for holding up the initial tranche of IMF supports last year.

There are additionally fears that Britain and the Netherlands will take a tough position on Icelands focus to stick on the EU and exclude to authorize the begin of advent talks until an Icesave understanding is sealed in to law.

Those are factors that Iceland can do but as it struggles to redeem from a subjection in that majority of the promissory note complement collapsed.

The Icelandic supervision has foresee the economy will stipulate 2pc to 3pc this year, after timorous 7pc last year.

"Several months check could lower the 2010 contraction to about 5pc," economy apportion Gylfi Magnusson pronounced this week.