Iceland will hold a new referendum soon on a new deal to repay Britain and the Netherlands for money lost in the collapse of an Icelandic bank in 2008, after the deal was rejected by Iceland's president on Sunday, according to reports reaching here from Reykjavik.
The so-called Icesave deal was approved by 44 votes against 16 in the Icelandic parliament last week and can be finally effective after the Icelandic president signs it.
But President Olafur Grimsson said he would not sign the deal, and decided to send it to a national referendum instead.
The majority of the nation wants to vote on the deal as indicated in recent polls, the president was quoting as saying at a press conference.
Iceland's Prime Minister Johanna Sigurdardottir said she was disappointed and surprised by the president's decision.
"We will now go ahead and plan for the referendum," Sigurdardottir said. But it is not yet known when the vote will take place.
Iceland, Britain and the Netherlands on Dec. 10 reached a new deal that Iceland will repay the other two countries some 5 billion dollars through a period of 30 years beginning 2016.
Under the deal, the previous 5.5-percent interest rate was reduced to 3 percent for the Dutch portion and 3.3 percent for the British portion that Iceland has to pay back due to the collapse of its online bank in 2008.
President Grimsson had refused to sign on the previous deal due to majority opposition from the public. It resulted in a national referendum that voted down the bill in March 2010.