Its proposed application for EU membership -- which is opposed by the island’s seafood industry -- has split Icelandic politics and the ruling coalition, and could potentially bring the government down if agreement is not reached.

The tiny Civic Movement, a new party that came into existence on the back of the widespread dissatisfaction following the banks' collapse last year, and entered Parliament in April with four members, has indicated it may vote against the government if the government's policy on the IceSave agreement is not reversed.

Last