Darling blamed as Iceland’s bank troubles spiral

Iceland today turned on Britain's Chancellor Alistair Darling as a third bank was nationalised.

Kaupthing, which owned City investment bank Singer & Friedlander and UK internet bank Kaupthing Edge, said its board had resigned and handed control to the Icelandic Government.

The declaration came as the London stock market gave a half-hearted welcome to the Government's £500 billion bail-out plan for High Street banks and yesterday's emergency half-point cut in interest rates.

The FTSE 100 index of leading shares rose 67.62 points to 4434.31.

But in Iceland the crisis continued to spiral. Landsbanki was put into receivership earlier this week and Glitnir followed yesterday. Kaupthing had been offered a €500 million (£390.7 million) loan by the government, led by Prime Minister Geir Haarde.