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Iceland vote freezes repayment plan

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Iceland vote freezes repayment plan

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Iceland could be facing a political and financial crisis after voters appeared to have rejected a referendum on a plan to repay debts to Britain and the Netherlands for a second time.

With partial results in, the “no” camp had a safe lead, delivering a stinging blow to parliament which had overwhelmingly backed the internationally-negotiated deal.

The debt was incurred when Icesave, a subsidiary of Landsbanki, collapsed in late 2008, and Britain and the Netherlands compensated their nationals who lost 3.9 billion euros in savings.

But opponents to the plan say there is no legal obligation on ordinary Icelanders to repay losses incurred by a private bank.