Iceland's president refuses to sign repayment bill

Iceland's president Olafur Grimsson has refused to sign a bill to repay more than $5 billion to British and Dutch investors who lost money in the country's failed banks.

It is only the second time in the country's history that the president, a largely symbolic figurehead, has refused to sign a bill into law, reports Reuters.

Under the state's rules, the bill will now be put to a nationwide referendum.

The bill was passed by the nation's parliament in an attempt to improve Iceland's international standing as financial aid is vitally needed to help the country recover from its financial meltdown.

But many voters were angered by the decision, leading Mr Grimsson to make his stand.

"The people must be convinced that they themselves determine the future course," he said. "The involvement of the whole nation in the final decision is therefore the prerequisite for a successful solution, reconciliation and recovery."

There is great anger against the UK for using anti-terror legislation last year to freeze Icelandic assets at the height of the crisis, reports the Telegraph.

Almost 50,000 people in the country, around 25 per cent of the adult population, have signed a petition calling for the bill to be scrapped.