Leaders from across Iceland's political spectrum met Dutch and British ministers on Friday over more than $5 billion in Icesave bad bank debts, but the talks ended with no signs of progress.

The Dutch and Icelandic finance ministries said that parties exchanged views at The Hague talks on the dispute surrounding losses on online accounts at Icelandic banks which collapsed in late 2008.

The sides will now consider the situation after this meeting, but at this stage no further discussions are scheduled, the ministries said in separate statements.

Britain and the Netherlands have already compensated savers in their countries who lost money in Icesave accounts. Now they want the money back from Reykjavik.

Iceland, which needs to agree terms for repaying the British and Dutch governments if it is to unblock vital financial aid, is set to hold a national referendum on the issue on March 6.

In The Hague Icelandic Finance Minister Steingrimur Sigfusson met his Dutch counterpart Wouter Bos and British Financial Services Minister Paul Myners, along with leaders of Iceland's right-wing opposition Independent and Progressive parties.

They talked for less than three hours and left without talking to reporters outside the Dutch Finance Ministry.

By bringing opposition leaders into the discussions, a new approach, Iceland's left-leaning government is trying to overcome internal divisions on the island that some argue could lead to even more economic misery.

Emotions over the Icesave affair run high and Icelandic opinion polls point to a no vote in the March referendum over whether to approve a deal under which the government would provide an open-ended guarantee to repay the money.

Should the current Icesave bill fail in the referendum, an earlier law comes into force. Britain and the Netherlands have rejected that law because of limits it places on repayment.

A no vote raises the possibility of a protracted economic downturn, or even economic isolation, because funds from international lenders could be held up.

UNITED FRONT?

Iceland's parliament approved the bill spelling out terms as negotiated with Britain and the Netherlands but the president refused to sign it, citing popular anger, and forced a referendum.

While Iceland's government sees the bill as the lesser of two evils -- the other being the economic fallout that could result from a no vote -- opposition politicians have lined up against it and argued Reykjavik can get better terms.

Many Icesave critics have accused Britain and the Netherlands of ganging up on the island of 320,000 people at a time when it is in dire economic straits.

Olafur Hartharsson, a professor of political science at the University of Iceland, held out hope Reykjavik might solve the problem without a vote if the nation presented a united front.

This might be a sign there is at least an attempt between government and opposition to find a joint solution everyone can live with, and hopefully there would be some agreement so that a referendum could be avoided, he said.

(Reporting by Greg Roumeliotis in Amsterdam, Harro ten Wolde in The Hague and Niklas Pollard and Nicholas Vinocur in Stockholm; Editing by David Stamp)

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