The people of Iceland will vote on 6 March over whether to approve a deal to repay $5.7 billion to the UK and The Netherlands for depositors’ losses in a collapsed online bank, the government announced on Tuesday.

The Icelandic Justice Ministry said in a statement that it had agreed the date with the national electoral committee; 6 March is the latest date the vote can be held under Icelandic election rules.

Earlier this month, Icelandic President Olafur R. Grimsson invoked a rarely used power to veto the bill, which laid out terms for repaying the Dutch and British governments for money they paid to compensate depositors whose savings were lost in the collapse of Icesave Internet bank.

The dispute has jeopardised Iceland’s bid to join the European Union and threatened a crucial $4.6 billion bailout package promised by the IMF and Nordic countries.

Prime Minister Johanna Sigurdardottir is urging Britain and The Netherlands to renegotiate the repayment deal in the hope of appeasing her domestic opponents and avoiding the referendum.