Iceland rejects repayment deal

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10 April 2011 were last updated at 11: 04 GMT the latest plan to repay of the Great Britain almost 60% of the people against the PlanIcelanders and around billion lost euro the Netherlands when the country's banking system is reduced rejected in 2008.

Partial referendum results showing coordination No 58% and 42% supported the plan.

Jóhanna Sigurðardóttir, Iceland Prime Minister, said that the rejection meant "the worst option has been selected".

UK Treasury Minister Danny Alexander said the decision was "disappointing" and the matter would go to an International Court.

Dutch Finance Minister Jan Kees de Jager, he said would consulting UK on further steps against Iceland, but added that the matter would likely in court end.

"I am very disappointed that the Icesave agreement not get." This is not good for Iceland for the Netherlands.

"The time for negotiations is over." Iceland remains committed to repay. Now for the courts to decide the issue is, "said Mr de Jager in a statement."

It is the second time a referendum rejected a repayment deal.

Icelandic Landsbanki ran bank savings accounts in the UK and billion lost it the Netherlands under the name Icesave and investors euro (£ 3 billion, $5 billion).

When it collapsed in 2008, the British and Dutch Governments had to reimburse 400,000 citizens - and repay money to decide Iceland like that.

Continue reading the most important story Joe Lynam BBC News

The Icelandic people were doomed, if she did and damned if they don't. It looks, as if she could not stomach still the idea of paying the debts of the private banks - disabled even if the revised agreement was essential more generous.

The consequences of this vote, the referendum is that much more could be extended Iceland's years in the financial wilderness.

Moody's and other rating agencies look set, the land of even further, downgrade costs it unaffordable, to borrow on the markets.

Icelandic bid will accede to the EU pauses, or even a veto of the United Kingdom and the Netherlands. And the tiny Atlantic economy faces legal action in the EFTA Court which, interest rate figures could force it to earlier than planned, and with a punitive expedition.

Democracy will not pay if you are an Icelander.

Mr Alexander, Chief Secretary to the Treasury, said Andrew Marr programme: "It is obviously disappointing..." We have tried to get a negotiated solution.

"We have an obligation to get the money back and we will continue to have, until we do..." We have a difficult financial position as a country, and this money would help, "he said."

'Such a horror'

Icelandic Parliament had backed up the business, but President Olafur Ragnar Grimsson rejected certificate pattern, which trigger the referendum.

A previous deal to introduce tougher reimbursement regime, was rejected in a referendum of March 2010, at 93% of the voters.

Finance Minister Steingrímur Sigfússon released a third attempt, voters accept a repayment deal to exclude.

"I think we are a very clear sign of this referendum, always, that further negotiations are excluded." "No use in trying the back."

A process is can take now to an International Court, the European Free Trade Association surveillance authority, referred to the several years the problem.

Backers of a 'yes' votes had argued that the agreement was the best way to resolve the problem of the costs and risks repayment after Iceland.

The 'no' camp said the Icelandic taxpayer was under no legal obligation to pay a private bank losses and that the agreement would put a heavy burden on the nation.

Extended period of time, lower interest rates

Under the terms of the rejected deal Iceland would have paid back the money more than 30 years between 2016 and 2046 with 3.3% interest in the United Kingdom and 3% in the Netherlands.

The previous proposal, the money was back interest rates between 2016 and 2024 with 5.5%.

Prime Minister Johanna Sigurdardottir: "disappointing numbers"

The actual cost to the State was expected much less than the billion owed euro, as the Government said that most would come the repayment from the sale of the assets of Landsbanki.

The Government has said it does not expect the costs more than 50 billion credit card debit (£ 168 m).

Analysts say that a solution vital is Islands prospects for recovery, the country would again on the financial markets thus to finance itself.

Solving the dispute is also key to the Islands see opportunities to join the EU.

Iceland the three largest banks broke within days of each other in October 2008.

The Government compensated Icelandic savers, but all faced overseas customers to lose their money.

The problem sparked a diplomatic row between Iceland and the United Kingdom and the uncertainty about Icelandic economic recovery creates.