Seven months after Iceland's banks went under, taking with them billions in British savings, relations between the two island nations look set to freeze over once more.

Earlier this month, Iceland's Prime Minister Johanna Sigurdardottir said she would propose accepting a £3.3bn loan from the UK and the Netherlands to recompense thousands of deposit holders who had their money in internet accounts at the failed lender Landsbanki Islands.

Yet the country's thousand year-old parliament, the Althingi, looks set to challenge that decision on Monday because of concerns that Iceland is not legally responsible for the lost funds.  26-Jun-09.

http://news.sky.com/skynews/Home/Business/Icelands-Parliament-And-Citizens-Unhappy-About-Receving-Loan-Proposals-From-UK-And-The-Netherlands/Article . . .