The Icelandic government has approached several foreign governments to serve as mediator between Reykjavik and the British and Dutch governments in the Icesave affair, say Icelandic media.

Although it did not name its source, Channel 2 television says that Norway is the best candidate. Oslo is seen as sympathetic to Iceland and also mediated between London and Reykjavik in the fishing rights dispute in the 1970s.
 

Iceland owes the British and Dutch governments around 4 billion euros for losses incurred by account holders when Icesave, the Icelandic Internet bank, collapsed in late 2008. The British and Dutch governments have already compensated savers who lost money when the bank failed. The repayment terms have yet to be settled and are a source of friction between the three countries.
 

Earlier this month, Iceland's president refused to sign a law setting out the terms and forced a referendum on the issue. The plebiscite will be held in March and it is highly likely that Icelanders will vote against the law. If the bill is rejected, Reykjavik will return to an earlier version of the bill that was rejected by London and the Hague because of limits on repayment.
 

Reykjavik is considering with drawing the disputed bill and asking London and the Hague to return to the negotiating table. However, Britain and the Netherlands have both said they are not willing to reopen talks. Earlier this week, Dutch Finance Minister Wouter Bos said the Netherlands would hold Iceland to its commitments and expected the entire sum to be repaid.
 

Photograph: IceSave advert; mydogminton/Flickr