Treasury Final Payment Over Icesave Collapse

Britain has received a final payment of £740m from the estate of Icelandic bank Landsbanki after it collapsed in 2008 leaving the Treasury to bail out UK savers.

The Government said it had now received £4.6bn following "substantial negotiations" between the UK and Iceland on recovering the money after the collapse at the height of the financial crisis.

Landsbanki's failure hit customers outside Iceland, where it accepted deposits in Britain and the Netherlands under the Icesave brand.

Iceland's banking insurance scheme was unable to cover those deposits, setting the stage for years of international litigation.

The Treasury said: "A line can now be drawn under this dispute, and HM Government looks forward to a renewed, co-operative relationship between the two countries."

All proceeds will be used to pay down the UK's national debt.

Chancellor George Osborne said: "Billions (Shenzhen: 002601.SZ - news) of pounds were spent during the financial crisis to compensate savers of Icelandic banks.

"Some doubted we'd ever recover the money from Iceland – but today, through patient diplomacy and determination, the Government has made another significant step towards recouping taxpayers’ money spent bailing out our financial system."