MADRID, Jan 8 (Reuters) - Iceland's efforts to join the European Union could be delayed by a referendum on terms for repaying Britain and the Netherlands following a banking collapse, the Spanish EU presidency said on Friday.
British and Dutch depositors in high-interest "Icesave" bank accounts lost their money when Iceland's entire financial system imploded in late 2008 under a heavy weight of debt.
The government plans to hold a referendum on the issue late in February or early in March. The result is uncertain, with opinion polls suggesting a majority of the 320,000 Icelanders oppose the so-called Icesave bill.
Spanish Foreign Minister Miguel Angel Moratinos reiterated the EU stance that the referendum was an internal matter for Iceland to decide but also confirmed what officials have been syaing privately -- that its accession bid could be held up.
"I hope the people of Iceland ... see in the EU its future project," he told reporters in Madrid, making clear he still hoped Iceland would join the 27-country bloc.
But he added: "Clearly if it (the bill) is not approved, it could slow down the whole calendar...it could slow the whole process of negotiations."
Britain and the Netherlands compensated their savers in full and want their money back from Iceland. But Icelandic President Olafur Grimsson this week unexpectedly refused to sign a bill to repay them.
His rejection has thrown the country into crisis and jeopardised continued aid from international lenders, seen as vital for getting the economy back on its feet.
Many Icelanders are angry about the bill -- which only squeezed through parliament by 33 votes to 30. They believe it lumbers the island's taxpayers with a crippling burden which is not their responsibility.
Others say it is the only way to restore the country to economic normality, ensure it has access to international markets and can join the EU, a move seen as crucial to long-term financial stability. (Editing by Mark Trevelyan)