Iceland defends right to vote on Icesave redress

The President of Iceland said yesterday that his country would press ahead with a referendum on whether or not to pay the British and Dutch governments compensation for losses they incurred during his country's financial crisis.

Ólafur Grimsson spoke as Icelandic officials met the City minister, Lord Myners, and his Dutch counterpart to discuss the $5.7bn (£3.5bn) the island nation owes for money that Britain and the Netherlands used to compensate their depositors in Icesave, the internet bank that collapsed with its parent Landsbanki in October 2008.

Mr Grimsson said: "For an entire nation to vote on to what extent they are willing to shoulder this burden is to me a pinnacle of democracy." Opinion polls suggest that on 9 March Icelanders will vote against a Bill authorising repayments.