New Icesave deal approved in Parliament

The Icelandic parliament has approved a plan to repay the UK and the Netherlands the €4bn (£3.1bn) they compensated to Icesave investors.

The British and Dutch governments had to reimburse 400,000 savers after Icesave's parent company, Landsbanki, collapsed in 2008.

At the time, although the Iceland compensated its own citizens, overseas savers faced losing all their money before their own governments stepped in.

The new deal still requires approval from the President, who previously refused to sign off a repayment proposal in December 2009.

The failure to come to an agreement has undermined Iceland's economic recovery and blocked talks on its joining the European Union.