Joint administrators of Landsbanki Guernsey branch Lee Manning (left) and Rick Garrard

LANDSBANKI Guernsey’s administrators could take legal action against the Icelandic Government in an effort to maximise recoveries for depositors.

The Royal Court has given its approval for the failed bank’s administrators to start proceedings if depositors continue to be treated unfairly.

A vote showed an overwhelming majority of depositors in favour of taking legal action.

Rick Garrard and Lee Manning said yesterday: ‘The joint administrators are seeking fair and equitable treatment for depositors in the bank; having seen depositors in Icesave being bailed out by UK and Dutch Governments, they are naturally aggrieved and are further aggravated by seeing those governments now being prioritised over them.’

Iceland brought in ‘emergency laws’ the day before Landsbanki Guernsey fell into administration that gave priority for certain categories of depositor.

‘Should the administrators fail to obtain an equitable redress, the depositors have authorised them to pursue formal damages against the Icelandic Government.’

The administrators said they regretted that they might have to take such action but it was not fair for governments to enjoy priority over the bank’s depositors.

It is understood the move could raise an extra 5p in the pound.