Battle forbank money as Iceland votes 'No'

With more than 40 per cent of the ballot counted, 93 per cent had voted “no” in a referendum over whether to pay billions of pounds back to the UK and Holland following the collapse of savings bank Icesave.

The Government, which was forced to compensate tens of thousands of UK savers after the collapse in 2008, was understood to be “disappointed” but “not surprised”.

A Treasury spokesman said: “The UK remains committed to reaching a final agreement with Iceland in due course. The result of the referendum is a matter for Iceland.”

The British and Dutch governments want reimbursement for the 3.8bn euros (3.4bn) they paid out in compensation to customers in 2008.

Talks between Iceland, Britain and the Netherlands to come up with a better deal to try to avert yesterday’s referendum broke down at the end of last week.

Many voters in Iceland have objected to the tough terms of the deal imposed by the debtor countries, not the idea of payment itself.

It would seemingly require each person to pay around $135 (89) a month for eight years – the equivalent of a quarter of an average four-member family’s salary.

“This result is no surprise,” said Prime Minister Johanna Sigurdardottir. “Now we need to get on with the task in front of us, namely to finish the negotiations with the Dutch and the British.”

Public sector pension funds were among those hit by the collapse of Icesave and the Barnsley Building Society was also forced to seek a merger with the Yorkshire Building Society because it had 10m tied up in it.

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