Icesave talks to start in London on Monday -sources

Iceland is trying to lure the British and Dutch governments back to the negotiating table on the "Icesave" problem, hoping to avoid a planned March 6 referendum on the issue and unlock vital aid for the island's stricken economy.

A Icelandic government source has said the new proposal involves quicker repayment of the country's debt from a sale of the assets of failed bank Landsbanki.

A spokesman at Iceland's finance ministry said the government hoped to present the new proposal "very soon."

One creditor nation source said he "could not rule out" that the talks would stretch more than one day.

The source also said the talks were not likely to be at the highest levels, particularly as European Union finance ministers are meeting early this week to focus on the public debt crisis in Greece.

Britain and the Netherlands have already compensated savers in their countries who lost money in "Icesave" high-interest online accounts and insist that Iceland must pay the money back.

Iceland's parliament passed an Icesave bill setting out repayment terms in December, but the president refused to sign it, trigging the referendum.

Reykjavik wants to solve the problem so it can avoid the vote, as opinion polls indicate Icelanders will reject that bill which is based on an earlier deal with the British and Dutch governments.

The two governments have so far baulked at reopening negotiations on the issue, which is holding up aid from international lenders vital for getting Iceland back on its feet.