A government spokeswoman said two days of talks produced "significant progress," the Financial Times reported. She said the Treasury Department delegation had returned to Britain from Iceland.

The talks did not cover millions of dollars deposited in Iceland by British non-profit organizations and local government agencies. Cats Protection is reported to be the hardest hit with 11.2 million pounds ($19 million) invested in Iceland, while the Borders Council in Scotland has about 10 million pounds ($17 million), The Scotsman reported.

Dutch officials reached a firmer agreement with Iceland, the Financial Times said. Dutch depositors will receive up to 20,887 euros ($28,240) each, while the Netherlands will provide a loan to help Iceland pay the funds and the Dutch central bank will process claims.

The financial crisis in Iceland, which has led to the nationalization of the country's major banks, has strained relations with Britain. British Prime Minister Gordon Brown has attacked Iceland for allowing its nationals access to their accounts while freezing those of foreigners, and Britain has used anti-terrorism legislation to freeze British assets of Iceland's largest bank, Landisbanki.