Reykjavik - Iceland's largest bank group Kaupthing was Thursday taken over by the Icelandic Financial Supervisory Authority.

Kaupthing was the third of the North Atlantic nation's major banks to be taken over by the agency under provisions of special legislation adopted late Monday.

Earlier this week the agency took over Landsbanki and Glitnir.

Kaupthing's domestic deposits were "fully guaranteed" and domestic operations were to remain open for business as usual, the agency said adding that the move was "guarantee a functioning domestic banking system."

London  - The British government pledged Wednesday to compensate some 300,000 savers who have placed their money with an Icelandic internet bank following the country's banking nationalization programme.

Britain's Chancellor of the Exchequer Alistair Darling said Wednesday that the government would help savers with deposits in the bank Icesave, whose parent company Landsbanki was nationalized by the Reykjavik government.

"I am very aware of the fact that Iceland has, sadly, chosen to default on its obligations here. We are pursuing Iceland and we will pursue it vigorously to make sure that we get the money due to us back," Darling told the BBC.

Reykjavik/Moscow - The Icelandic currency stabilized Tuesday after the central bank said Russia would grant a loan "in the amount of 4 billion euros (5.4 billion dollars)" for the coming four years.

Later the central bank said the countries "have decided to start in the next few days negotiations on financial issues," suggesting there was no done deal.

The statement was apparently in response to reactions from the Finance Ministry in Moscow which said no decision had been made, according to remarks attributed to deputy Finance Minister Dmitri Pankin by the Interfax news agency.

Russia has plentiful foreign reserves as a result of several years of record oil prices.

Reykjavik - The Icelandic government, backed by opposition parties, adopted an "emergency law" late on Monday to reorganize its financial system that has been severely battered.

Prime Minister Geir Haarde said in a televised speech to the nation that the bank crisis also posed a national threat.

"There is a very real danger, fellow citizens, that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy," he said.

The new legislation was to "adapt the banking system to Icelandic circumstances and rebuild the trust of foreign operators in Icelandic banking and financial operations," Haarde said.

Reykjavik  - The Icelandic Financial Supervisory Authority on Monday said was temporarily suspending trading of shares and other "financial instruments" issued by several banks including Glitnir bank, Kaupthing bank and Landsbanki.

A week ago, the government of Iceland bought a majority stake in Glitnir bank.

The government paid 600 million euros (877 million dollars) for a 75-per-cent stake in Glitnir, saying the move was aimed at strengthening Glitnir's capital ratio and liquidity.

The trading halt Monday was linked to a possible announcement of further government intervention.

Reykjavik - The government of Iceland Monday bought a majority stake in Glitnir bank, the government and bank said.