Iceland rejects plan to repay British investors

Voters in Iceland rejected a government-backed deal to repay Britain and the Netherlands for the $5bn lost when its banking system collapsed plunging the economically fragile country into new uncertainty.

Sunday’s final results showed the “no” side had just under 60 per cent of the votes and the “yes” side about 40 per cent.

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It is the second time voters have defeated a bid to settle the bitter dispute and the government said it would be the last.

He said Iceland would now opt for Plan B, with the dispute going to the European Free Trade Association court, which could impose harsher terms on Iceland than those rejected in Saturday’s vote.