Iceland's parliament has passed a bill to hold a referendum no later than 6 March on a deal to repay Britain and the Netherlands more than $5bn owed as a result of the financial meltdown.

Representatives agreed on the referendum after President Ólafur Ragnar Grímsson unexpectedly refused to sign an amended law this week on repayment, citing a wave of popular anger over the bill.

All 49 representatives present in the 63-seat body voted for the referendum bill, according to the official parliament website.

Legislators came back to work today, nearly 3 weeks ahead of schedule, to work out the bill.

‘The government has been instructed to present the case (to voters) in a neutral manner in media,’ the official website said.

‘The minister of justice will decide on the date in coordination with the Electoral Commission.’

The date of the vote will depend on issues such as when ballots can be prepared and voter registration lists updated.