What Iceland banking crisis means

By Dave Howard
Newsbeat politics reporter

Hamleys toy store in London is one of the shops with Icelandic investment

It's thought nearly £1bn of British taxpayers cash is at risk in Iceland.

The country's banking system's collapsed with many local councils' money stashed in accounts there.

Gordon Brown wants the government to protect the cash.

But ask people what they know about Iceland, and you get plenty of of different answers.

One Newsbeat listener said: "Cheap food! I used to work in Iceland. It was easy money!"

Another said: "Iceland is beautiful. I've heard a lot about it. I know people who've been and I want to go."

Political storm

You might think first of the frozen food store but it's the country that's been getting an increasingly frosty reception.

Another Newsbeat listener summed the situation up, when he said: "Iceland is broke. And there's a lot of people's money in risk."

PM Gordon Brown and Iceland's leaders have been in a war of words after Iceland locked about £1bn of British taxpayers' cash into their collapsing banks.

Iceland faces the possibility of its economy going bankrupt

More than £100m belonging to British charities is also locked down in Iceland.

Britain has been threatening to shut down Icelandic business here if they don't free up our cash.

But Iceland's retaliated by saying they're being treated as badly as terrorists.

The UK government says that's rubbish but relations between the two countries are as low as they've been for years.

It also means problems on Britain's high streets and some football supporters.

French Connection, Woolworths, Debenhams and Iceland the supermarket are all backed by Icelandic businesses.

West Ham is substantially backed by an Icelandic businessman called Bjorgolfur Gudmundsson and he's thought to have lost about £200m in the current crisis.

It's just another chapter in a long running story of global money worries.

But until Iceland says it'll give back British cash back, there's no guarantee that Britain won't lose hundreds of millions of taxpayers' pounds that it thought were safely invested.