REYKJAVIK (AFP) - Iceland's parliament on Monday took up what is to be the last debate on a bill to reimburse the British and Dutch governments for compensating former clients of the Icesave online bank.

The bill, which needs a majority of parliamentary votes to be adopted, is expected to be voted on in the middle of the week and its outcome could threaten the survival of the left-wing government.

It plans for a payout of several billion euros (dollars) to the British and Dutch governments for compensating more than 320,000 British and Dutch savers who lost money in the collapse of the Icelandic bank.

Iceland's Social Democratic Prime Minister Johanna Sigurdardottir has said many times the government, a coalition of the Social Democrats and the Left Greens, would not continue if it could not get the bill through.

According to the estimates of members of parliament interviewed by AFP, 31 MPs -- out of 34 coalition members -- were poised to vote in favour of the bill, 30 were going to vote against and two MPs were still undecided.

Iceland's parliament already in August approved a controversial deal to reimburse 3.8 billion euros (5.4 billion dollars) to London and The Hague.

But the British and Dutch governments rejected that deal because of one of the amendments negotiated by Prime Minister Johanna Sigurdardottir in order to pass the deal through the Icelandic parliament.

Icesave, an online subsidiary of the Landsbanki bank which had to be rescued in October 2008, attracted over 320,000 British and Dutch savers due to its high interest rates.

But they lost their savings when accounts were frozen during last year's credit crunch. The British and Dutch savers were partially compensated by their own governments, who then turned to Reykjavik looking for the money paid out.

The Icesave issue is currently an obstacle to Iceland's accession to the EU and the International Monetary Fund (IMF) in October said the dispute was the cause for a lengthy delay in extending financing to the recession-stricken country.

On December 14, the IMF announced it had reached an agreement with the Nordic country on the disbursement of a third tranche of a 2.1 billion dollar standby loan Iceland contracted in November 2008 following the collapse of its banks.