Landsbanki Guernsey operations director Steve Chandler, left, and managing director Steve Le Poidevin were refusing to answer calls yesterday about customers’ money – or earlier assurances that it was safe. (0575804)

AS THE UK threw a multi-billion pound lifeline to the banking industry yesterday, it emerged that local Landsbanki customers had tried to get their money back before it went into administration – and been blocked.

In a day of dramatic developments, investors spoke of their fears and attempts to withdraw life savings and how officials had told them they could not. One who had concerns in March was assured his cash was safe. Steven Crouch put the entire proceeds from the sale of his home into the bank after he moved to the island from England.

He tried to remove his money in March, after a friend warned him about Iceland’s economy, but was told he could not because it was in a bond – due to mature in December.

‘The bank said I could not touch my money and tried to reassure me that everything was OK,’ he said.  The bank said that its parent company in Iceland had given an undertaking to cover all liabilities in Guernsey should anything happen to the subsidiary.

It also claimed that Landsbanki in Iceland had been deemed ‘strong enough to withstand severe shocks to the financial system’ during stringent stress testing of the country’s banking system in February.

Although the UK rescue plan covers eight of the biggest banks, it is not yet clear whether that guarantee has been extended to the island.  That requires a decision by the parent company in the UK.