Iceland passes referendum bill on repayments to foreign depositors

The Icelandic parliament decided after an emergency session how to stage a national referendum on repaying almost €4bn to Britain and the Netherlands over the collapse of the Icesave bank – a poll that is seen as a defining moment in the bankrupted country’s economic recovery.

The government was forced into organising last night’s vote after Iceland’s President Olafur Grimsson refused to sign legislation on the repayment into law.