Iceland acting illegally - UK PM

BRITISH Prime Minister Gordon Brown today condemned Iceland's position on the freezing of bank accounts held by British savers, saying it was "effectively illegal action". "What happened in Iceland is completely unacceptable," Brown told BBC television. "I've been in touch with the Icelandic prime minister (Geir Haarde), I've said that this is effectively illegal action that they've taken."

Mr Brown added that Britain would "take further action against the Icelandic authorities wherever that is necessary to recover the money."

He said: "They have failed not only the people of Iceland, they have failed people in Britain."

The BBC reported that the amount invested by almost 100 British local authorities in Icelandic banks is more than £720 million ($1.87 billion).

The Local Government Association (LGA) has said it is not yet able to give a precise figure.

But the LGA and the government issued a joint statement after meeting today saying they would agree "an appropriate set of ways to assist" local authorities facing "severe short term difficulties" as a result.

One local authority, Kent County Council, has £50 million ($130.04 million) deposited in Landsbanki's British subsidiary Heritable and Glitnir Bank.

Transport for London, the agency responsible for the capital's public transport, has a further £40 million ($104.03 million) invested with Kaupthing Singer and Friedlander.

The bank, along with Glitnir and Landsbanki -- Iceland's three biggest -- have all been nationalised by the government in recent days.


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