Iceland would seriously look at taking legal action against the British

Sharp exchanges have flown between London and Reykjavik, reminiscent of the rancour of the 1970s "Cod Wars" when they clashed over the right to fish cod off Iceland.
Britain said it considered the Icelandic authorities' behaviour unacceptable, and that it was ready to take legal action to recover frozen British funds.
Prime Minister Geir Haarde called criticism from British Prime Minister Gordon Brown "disconcerting...and not very helpful". He was quoted as saying on Saturday that Iceland would seriously look at taking legal action against the British.
"The British actions, coupled with comments made by the British PM, who I have actually had good relations with, can easily be interpreted as an attack on the interests of the Icelandic nation," daily Morgunbladid quoted Haarde as telling his Independence Party.
Haarde said on Friday the British delegation would include people from the Treasury, the Bank of England, the Financial Supervisory Authority, the Financial Services Authority and the Financial Services Compensation Scheme.
The Netherlands and Iceland agreed earlier on Saturday for Iceland to compensate Dutch Icesave clients for up to 20,887 euros ($28,650). Icesave had about 108,000 depositors in the Netherlands. Iceland and Britain said on Saturday they had made "significant progress" and agreed in principle on an accelerated payout to retail depositors in failed Landsbanki's Icesave bank.
British deposits trapped in accounts in Iceland are estimated at 1 billion pounds, but the fate of British institutional investments there remained unclear.
Talks between the two countries took place after a steep deterioration in relations this week as the financial crisis that has gripped the Atlantic nation dragged in European depositors and investors.
"Significant progress was made on retail depositors of Icesave with arrangements agreed in principle for an accelerated payout to depositors," the countries said in a joint statement. They said the mood of the talks was friendly.
"The delegations agreed to work closely on the other remaining issues over the coming days," the statement said.
There was no mention of the fate of investments by British institutions, including local authorities and charities, in Iceland's banks.
When asked whether the remaining talks would cover British institutional investors, an Icelandic government spokeswoman declined to comment.
Iceland's government seized control this week of most of Iceland's banking system -- taking over Kaupthing, Landsbanki and Glitnir. Financial markets ground to a halt as traders reported hardly any trades in the crown currency and money markets while its stock exchange remains shut until next week.