Iceland's opposition turned up the heat on the center-left government on Wednesday to hold out for a tough new Icesave debt accord with Britain and the Netherlands, after a referendum rejection of its previous deal.

Iceland has for months struggled to find a way to pay back $5 billion in losses to the two European Union countries, with vital foreign aid on hold until Reykjavik resolves the issue.

The rejection of the government's last Icesave agreement in Saturday's referendum by 93 percent of the voters empowered the opposition to fight for a tougher deal.

The government backed away from its own deal in time to stay in power and vowed to quickly iron out a less costly new accord, with new talks due to begin within days.

Opposition leaders accused the government of being too willing to settle, even at the cost of turning their back on principles agreed with the opposition.

If the government is planning to depart from what was decided, then I'm not sure the consensus will hold, Progressive Party leader Sigmundur Gunnlaugsson told daily Morgunbladid.

You cannot deviate from the plan, particularly when we see the very decisive result of the national referendum.

Iceland owes money to Britain and the Netherlands after they compensated savers in their countries who lost deposits in a failed Icelandic bank in the global financial meltdown in 2008.

The Icesave debts come to more than $15,000 for each of the 320,000 people on the island but much of that should be raised by selling overseas assets of the failed bank Landsbanki.

The biggest opposition Independence Party said the government risked losing its support over the issue if it agreed to pay back the debts regardless of the future worth of the Landsbanki assets and other legal risks.

The government has twice, without the involvement of the opposition, settled the issue and I would not be surprised if it is planning to do so for the third time, Independence Party boss Bjarni Benediktsson was quoted as saying by Morgunbladid.

Prime Minister Johanna Sigurdardottir has said she hoped to resume debt talks in the coming days.

She has repeatedly questioned whether the expected benefits from holding out for a better deal were not offset by more economic hardship which result from a lack of any deal.

United kingdom Iceland