ICELAND’S prime minister has married her partner under a new law legalising same-sex marriage in the country, officials said yesterday.

Iceland’s prime minister has married her partner under a new law legalising same-sex marriage in the country, officials said today.

Defiant Icelandic voters have resoundingly rejected a €3.9bn plan to pay off Britain and the Netherlands for debts spawned by the collapse of internet bank Icesave, according to initial results today.

Angry Icelanders went out to vote today determined to give the government a bloody nose over plans to use €4bn of taxpayers' money to pay Britain and The Netherlands for lost deposits when a major bank collapsed.

Iceland is pressing Britain and The Netherlands to renegotiate $5.7bn (€3.96bn) owed for lost bank deposits.

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.

Iceland has agreed to repay Britain and the Netherlands $5.7bn (€3.82bn) it borrowed to compensate savers who lost funds in the collapse of an Icelandic internet bank, the Reykjavik government said.

Iceland decided today to repay Britain and the Netherlands the billions it borrowed to compensate savers in those countries who lost funds in the collapse of an Icelandic internet bank last year.

Iceland’s new government said it will ask parliament to vote on whether the recession-hit country should start membership talks with the European Union.

Iceland’s leftist coalition today won the country’s general election striking a blow at the pro-business Independence Party that many blamed for the collapse of the country’s banking system.

Iceland is set to appoint the world’s first lesbian prime minister – a former flight attendant who rose through the political ranks to become a cabinet minister.