Iceland has said it is not bound by the agreements it made with the Netherlands and the UK over repayment of the lost deposits of the failed Icesave bank.
Icelandic Prime Minister Johanna Sigurddottir wrote in a letter to UK Prime Minister Gordon Brown that her country signed the accords to make up for the lost savings without "an unequivocal legal obligation to do so".
Iceland's 63-member parliament still has to agree to the revised deal. The Icelandic opposition has raised objections. A vote is expected in the next few weeks.
Prime Minister Sigurdottir wrote that she counts on the Netherlands and the UK to deal with the Landsbanki case in all honesty and confidence. Iceland borrowed 1.8 billion euros from the Netherlands and 4 billion dollars from the UK to cover the amount due to depositors.
Many Dutch depositors had put their savings into an Icesave account, tempted by the high interest rates offered by the online bank.
Read more: The Iceland savings saga continues
The Icesave website offered high interest rates for savings (ANP Photo)
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