**Iceland’s prime minister is due to meet EU officials in Brussels to discuss how to break the impasse over a planned payout to the UK and the Netherlands.**Johanna Sigurdardottir is embroiled in a row over deposits lost when the online bank Icesave collapsed.
The UK and Dutch governments, which compensated savers, want Iceland to repay 3.8bn euros (£3.3bn; $5.4bn).
Iceland plans to hold a referendum on the repayment on 6 March, but the government may reach a different deal.
Opinion polls suggest that a majority of Icelandic voters would reject the repayment plan.
The dispute has delayed International Monetary Fund (IMF) help for Iceland, which Reykjavik needs to shore up its stricken economy.
The country’s parliament voted for a referendum on the Icesave bill after President Olaf Ragnar Grimsson vetoed the repayment to the UK and the Netherlands.
Opponents say the repayment plan forces Icelandic taxpayers to pay for bankers’ mistakes.
Icesave collapsed in October 2008, affecting thousands of UK and Dutch savers who held deposits with the bank.
The dispute has also overshadowed Iceland’s application to join the EU, which was submitted in July. Iceland’s economic crisis persuaded many of its politicians that it would be better off inside the 27-nation bloc.