Iceland's president on Sunday triggered a referendum on an updated plan to pay $5 billion to Britain and Netherlands for debts incurred from the financial crisis, creating new uncertainty over the island's economic recovery.
Iceland, whose economy and financial system crashed in late 2008, owes the money to Britain and the Netherlands because both countries bailed out domestic savers who lost money in online "Icesave" accounts run by a failed Icelandic bank.
It is the second time President Olafur Grimsson has vetoed an Icesave repayment bill. In the last referendum, a big majority of the country's roughly 200,000 voters threw out an earlier payment plan, sending negotiations between the three countries back to square one and delaying economic recovery.
Grimsson said that the current parliament was the same as that which had approved the original Icesave deal and that, since then, it had not received a new mandate from the people to decide the issue alone.
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