* Says solution needed to $5 billion Icesave debt dispute
* Says Dutch also to lobby IMF for repayment
* Iceland President: Landsbanki estate should cover payout
(Adds Dutch FinMin quote, background, Iceland president)
AMSTERDAM, April 12 (Reuters) - The Netherlands will block Iceland's bid to join the European Union unless a dispute over $1.3 billion on unpaid debts is resolved, the Dutch finance minister said on Tuesday.
Jan Kees De Jager also said he wanted to lobby the International Monetary Fund, which has been giving aid to Iceland to help it recover from economic meltdown, to make sure the money was repaid.
In a referendum on Saturday, Icelanders rejected for a second time a plan to repay a total of $5 billion to Britain and the Netherlands in debts from a bank crash. [nLDE73900H]
Both countries said they would take Iceland to court.
"A satisfactory solution of this problem needs to be in place... That is a precondition for entry," Dutch Finance Minister Jan Kees de Jager told parliament.
"We want to get the IMF aligned as much as possible to make sure there is an irreversible obligation for Iceland to meet its agreements," De Jager said.
In London, Iceland's President Olafur Grimsson said Britain and the Netherlands likely did not need to go to court to recover the $5 billion they could be repaid out of the bank's estate.
The debt was incurred when the two countries compensated their nationals who lost savings in online Icesave accounts owned by Landsbanki, one of three Icelandic banks that collapsed in late 2008, triggering economic mayhem.
The island of 320,000 people started membership talks with the EU last year, but popular enthusiasm for the 27-nation bloc has faded because of the row with Britain and Netherlands. [ID:nLDE66Q26A]
The government of Johanna Sigurdardottir has said a fresh round of talks on further funding from the IMF would be delayed several weeks due to the 'No' vote in the referendum.
De Jager reiterated a solution to the debt problem was now in the hands of the court of the EFTA Surveillance Authority (ESA), the European trade body overseeing Iceland's cooperation with the European Union.
(Reporting by Gilbert Kreijger; Editing by Sara Webb, John Stonestreet)