• Final installment completes 4.6 billion-pound recovery
  • Depositors were bailed out by the U.K. government in 2008

Iceland has fully reimbursed Britain for the collapse of Icesave after paying a final installment of 740 million pounds ($1.1 billion), the British Treasury said on Friday.

In 2008, Iceland refused to cover $5.4 billion in guarantees to 350,000 U.K. and Dutch depositors who were left facing losses when Landsbanki and other institutions collapsed during the Icelandic financial meltdown. The British and Dutch governments picked up the bill instead, and the lengthy battle to get the money back strained relations with Reykjavik.

British taxpayers paid 4.5 billion pounds to U.K. account holders and, with the final payment, have now recovered 4.6 billion pounds from the Landsbanki estate, the Treasury said in an e-mailed statement. The money will be used to pay down the national debt. Landsbanki operated under the name Icesave in the U.K.

“Through patient diplomacy and determination, the government has made another significant step towards recouping taxpayers’ money spent on bailing out our financial system,” Chancellor of the Exchequer George Osborne said in the statement.

The completion should mark a new era of cooperation between Britain and Iceland, the statement said.

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