Iceland and Russia to hold loan talks

LONDON (Reuters) - Iceland's Prime Minister Geir Haarde was quoted on Thursday as saying talks with Russia would resume over a possible loan.

"We talked on my initiative in August, and in Moscow two weeks ago and will resume at a date to be determined," Haarde told Britain's Times newspaper.

Iceland is seeking $2 billion (1.2 billion pounds) from the International Monetary Fund, but needs a further $4 billion of funding, Haarde said earlier this week.

Iceland fell into crisis when its top three banks folded in the face of liquidity problems and high debts, and its currency crumbled. It is also holding talks with other Nordic states.

It has been in dispute with the British government over guarantees to Britons who have savings in its stricken banks.

He told The Times the Icelandic economy would be crippled if the country had to pay the full amount Britain claimed was due -- comparing it with the debt Germany was saddled with after the First World War.

"It's an enormous number. Everyone has to figure out for themselves whether that would be sustainable," he was quoted as saying.

(Reporting by Avril Ormsby; Editing by Kim Coghill)