30-Mar-2016: Liquidators' Update, see Deloitte site

Icelandic bailout exposed rift at the Treasury

'Sir Nicholas Macpherson appears to have put his opposition to a loan for Iceland on record in a letter to the Chancellor'

Lehman Brothers had collapsed three weeks earlier, but as the world banking system teetered on the brink of collapse, Alistair Darling and his chief civil servant were engaging in a heated dispute about whether to bail out an Icelandic savings bank.

Letters obtained by the Liberal Democrats and shown to The Times offer extraordinary details of the battle between the Chancellor and Sir Nicholas Macpherson, the Permanent Secretary to the Treasury, over using taxpayer money to extend a £3 billion loan to Iceland in October 2008.

While Sir Nicholas expressed his deep concerns about underwriting the deposits of Icesave, Landsbanki’s online savings business, and warned that Britain might not be repaid, Mr Darling overruled both the civil servant and the Bank of England, ordering the Government to extend a multibillion-pound loan to Reykjavik. 19-Feb-10.