Yet by mid-week it seemed unlikely that the parliament would accept the Icesave deal unconditionally.
The UK and the Netherlands say they are owed the money following the collapse of Icelandic savings bank Icesave.
The Local Government Association wants the same blanket guarantee for councils as for personal customers of IceSave and other banks.
But it wants the same protection for councils as has been given to personal customers of IceSave and other failed Icelandic banks.
Once the Icesave bill is voted down by the referendum, it'll be back to the policy drawing board and the international negotiating table.
Under brand names like Icesave, these banks offered online accounts with high interest rates that were often the best available in the market.
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The British and Dutch governments have compensated their domestic depositors in Icesave for their losses, and are claiming the money back from the Icelandic government.
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The Icesave loans were the last vital piece of the restructuring.
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Icesave had stopped customers, including thousands in Britain, from withdrawing money from their accounts and British regulators have said it is likely to file for bankruptcy.
In Britain, Treasury chief Alistair Darling said deposits of British savers with Icesave, the online arm of Landsbanki, the bank nationalized by the Icelandic government on Tuesday.
Wikileaks subsequently also disclosed documents about Icesave and Landsbanki.
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The crisis in Iceland's banks forced it to borrow billions of dollars from the International Monetary Fund (IMF) - loans made on the condition that the issue of Icesave compensation would be resolved.
Since 2008, the UK government has been thwarted in its attempts to force the Icelandic government to repay all of the compensation the UK had paid to its citizens who had money in Icesave.
President Olafur Ragnar Grimsson and Iceland's Parliament had agreed to a repayment plan drawn up as what the press their calls the Icesave law, named for the high-interest accounts at the heart of the mess.
But as Icesave grew, European authorities realised that Iceland's coffers were far too small to provide deposit insurance to savers, and that its central bank lacked reserves to act as a credible lender of last resort in the case of a run.
And last month, after a judge had thrown out two additional charges, his trial began on four counts: failing to ensure that a financial stability group delivered the required results, failing to take action to reduce the size of Iceland's banking system, failing to verify the move of accounts from Landsbanki bank's Icesave program, and failing to focus more Cabinet meetings on the crisis.
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