The Althing, Iceland's parliament, on Friday passed legislation authorising a state guarantee for the loans involved in the Icesave dispute.

The dispute arose last autumn when the Icelandic authorities guaranteed Icelanders' deposits in two failed banks but not those of foreign nationals, who were refused access to funds for six to eight weeks. The resolution will see the country pay out almost $6 billion - almost a third of its pre-crisis GDP - to Dutch and British depositors with accounts in