Birgitta Jonsdottir, who represents a Reykjavik district, said Julian Assange, the founder of WikiLeaks, gave her the information in 2010, IceNews reported. Assange has been living in the Ecuadorian Embassy in London for more than a year to avoid extradition to Sweden.
In 2010, Britain, the Netherlands and Iceland were involved in bitter negotiations about deposits British and Dutch residents had made in Icelandic banks. At the time, an email apparently sent by a Canadian lawyer, Donald Johnston, who was advising the Icelandic negotiators, was leaked.
The email suggested Iceland should give up on being "Mr. Nice Guy."
British officials suggested Jonsdottir's allegations should be taken with a grain of salt since they come at a time when scrutiny in Britain of the intelligence agencies is high.
In recent months, documents leaked by former U.S. security contractor Edward Snowden have provided titillating details about U.S. spying on allies, including hacking into German Chancellor Angela Merkel's personal cell phone. Britain has also become embroiled in allegations its intelligence agencies partnered with the United States.