Iceland poll shows most plan to vote against Icesave deal

Six out of 10 Icelandic voters plan to reject a bill on repayment of more than $5 billion owed to Britain and the Netherlands in a referendum on the so-called Icesave deal, according to a poll published by an Icelandic daily on Saturday.

Iceland's parliament authorized on Friday the government to hold a referendum no later than March 6 on terms under which Reykjavik will repay the money lost in high-interest Icesave bank accounts during a financial meltdown in 2008.

Britain and the Netherlands compensated savers in full and want their money back.

Reaching agreement with the two European Union countries is vital for the flow of aid to Iceland, still in the grip of a devastating recession. A prolonged impasse could also have implications for Iceland's bid to join the EU.

Icelandic President Olafur Grimsson unexpectedly refused to sign an amended law this week approving repayment, citing a wave of popular anger over the bill. Under the constitution, his refusal forced Iceland to hold a referendum on the bill.

A poll published by Frettabladid daily showed 62 percent of respondents intended to vote against the Icesave bill in the referendum, while 38 percent wanted the law to go ahead as approved by parliament.

Since Grimsson's rejection, one other poll has showed voters against the Icesave bill and another has showed them in favor.

If voters reject the bill, the law reverts to an earlier version passed in August. Britain and the Netherlands rejected that version because repayments were not guaranteed after 2024.

The government, which wants to hold the referendum as soon as possible to avoid further economic fallout from the Icesave affair, had originally intended to hold a vote on February 20. The final date will depend on practical matters such as how quickly ballots can be prepared and the electoral register updated.

The president's refusal to sign the repayment bill wreaked political turmoil and forced Icelandic officials to appeal for the continued support of their Nordic creditors -- part of a multilateral aid program led by the International Monetary Fund.

Finland, Norway and Denmark all restated on Friday that a condition for their loans is that Iceland meets its international obligations.