Iceland’s parliament is close to approving the repayment of nearly €4bn ($6bn, £3.4bn) lost by British and Dutch savers in a failed Icelandic bank – but with a series of conditions that could yet cause the pact to unravel.

The compromise legislation, expected to be published on Monday, aims to end a two-month impasse since Iceland’s government struck a provisional deal with the UK and the Netherlands on the compensation.