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Brown: Iceland's actions illegal Brown condemns Iceland over banks
(about 2 hours later)
Prime Minister Gordon Brown has condemned Iceland's handling of the collapse of its banks and its failure to guarantee British savers' deposits. UK Prime Minister Gordon Brown has condemned Iceland's handling of the collapse of its banks and its failure to guarantee British savers' deposits.
Mr Brown said it was "effectively illegal" and "completely unacceptable".Mr Brown said it was "effectively illegal" and "completely unacceptable".
He said Iceland's regulators had failed "not only the people of Iceland, they have failed people in Britain". His government has frozen all UK-held assets of the Icelandic bank Landsbanki after it collapsed.
Iceland's prime minister Geir Haarde said it was "not pleasant" to learn that anti-terror laws were used to freeze Iceland firms' assets in the UK. Iceland's prime minister Geir Haarde said it was "not very pleasant" to learn that anti-terror laws were being used to deal with the company.
The government has taken action to protect the savings of individual Britons through the Financial Services Compensation scheme - but almost 100 councils have more than £720m in total invested in Iceland's banks that has not been guaranteed. Landsbanki, one of many banks hit heavily by the global credit crunch, was taken over by the Icelandic government and declared insolvent on Tuesday.
Assets frozen The 300,000 UK customers of its subsidiary IceSave were unable to access their accounts.
In an interview with BBC political editor Nick Robinson, Mr Brown was asked what could be done to stop councils losing millions. 'Further action'
He said the government was talking with local authorities about what could be done and intended to recover as much money as possible. Chancellor Alistair Darling later announced that all UK savers affected would be protected.
But the government has not yet done the same for almost £900m known to have been invested in Icelandic banks by UK councils, police and transport authorities.
In an interview with BBC political editor Nick Robinson, Mr Brown said the government was talking with local authorities about what could be done and intended to recover as much money as possible.
But he added: "What happened in Iceland is completely unacceptable. I've been in touch with the Icelandic prime minister. I said this is effectively illegal action that they have taken.But he added: "What happened in Iceland is completely unacceptable. I've been in touch with the Icelandic prime minister. I said this is effectively illegal action that they have taken.
I thought so for a few minutes this morning when I realised that a terrorist law was being applied against us Geir Haarde on whether relations were in 'crisis' Councils 'not reckless with cash'I thought so for a few minutes this morning when I realised that a terrorist law was being applied against us Geir Haarde on whether relations were in 'crisis' Councils 'not reckless with cash'
"We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money.""We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money."
He added: "This is fundamentally a problem with Icelandic-registered financial services authority - they have failed not only the people of Iceland; they have failed people in Britain."He added: "This is fundamentally a problem with Icelandic-registered financial services authority - they have failed not only the people of Iceland; they have failed people in Britain."
Britain has frozen the UK assets of Icelandic bank Landsbanki and the government has said local authorities will benefit from that. Mr Haarde, asked if he felt there was a crisis in relations between Britain and Iceland, said: "I thought so for a few minutes this morning when I realised that a terrorist law was being applied against us.
Earlier the Icelandic prime minister, Geir Haarde, was asked if he felt there was a crisis in relations between Britain and Iceland.
He replied: "I thought so for a few minutes this morning when I realised that a terrorist law was being applied against us.
"That was not very pleasant. I'm afraid that not many governments would have taken that very kindly, to be put in that category and I told the chancellor that we were not pleased with that.""That was not very pleasant. I'm afraid that not many governments would have taken that very kindly, to be put in that category and I told the chancellor that we were not pleased with that."
But he said he had cleared up a number of issues with UK Chancellor Alistair Darling. But he said he had cleared up a number of issues with Mr Darling.