London (CNN) -- An increasingly bitter dispute between the United Kingdom and Iceland over billions of dollars lost when banks collapsed is likely to end up in court, a top British government minister said Sunday.
The British government has "an obligation to get that money back, and we will continue to pursue that until we do," said Danny Alexander, the chief secretary of the Treasury.
He was speaking Sunday after Iceland's people voted to repeal a law aimed at solving the dispute.
Six out of 10 voters in the referendum on Saturday opposed the law, the government said in a statement Sunday, saying turnout was high.
Alexander called Saturday's Icelandic vote "disappointing," adding, "We have a very difficult financial position as a country ... This money would help."
"There is a legal process going on and we will carry on through these processes," he said on the BBC's "Andrew Marr" show.
The battle results from the collapse of an Icelandic internet bank in October 2008.
Britain and the Netherlands came up with more than $5 billion to bail out savers in their own countries who lost money in the failure of Icesave -- an online retail bank branch of Landsbanki.
They are now trying to claim the money back from Iceland.
Some payments will go ahead later this year, Iceland's government said Sunday, explaining that they were not affected by the vote.
"These partial payments are expected to cover close to a third of priority (depositor) claims. Moreover, latest figures on its assets indicate that the estate (of Landsbanki) will be able to pay over 90% of claims for deposits," the government said in a statement.
Under a European Union directive, Iceland owes compensation to Britain and the Netherlands. The Icelandic government has said it will honor its international obligations.
Netherlands Finance Minister Jan Kees de Jager is "very disappointed about the decision of the Icelandic electorate not to agree with the agreement reached between Iceland, the U.K. and the Netherlands," the Netherlands Finance Ministry said in a statement Sunday.
"The time for negotiations is over," de Jager said in the statement. "Iceland remains obliged to repay. The issue is now for the courts to decide."
The Netherlands Finance Ministry said it is consulting with the United Kingdom about further steps.
The International Monetary Fund loaned Iceland $2.1 billion in November 2009, and said repaying the money to the British and Dutch governments was a requirement of the loan.
Iceland has begun moves toward applying for European Union membership, which Britain and the Netherlands could block.
CNN's Bharati Naik contributed to this report.
Coat of arms of Iceland


Results from Iceland's  referendum on Saturday  show that Icelanders overwhelmingly  voted "no" on a government-approved plan to repay Britain and the Netherlands billions of euros lost in Iceland's 2008 bank crash.

In Sunday's final results almost 60 percent  rejected the deal, with the voting turnout high,  the government reported. This is the second repayment plan rejected by the voters; .

British and Dutch investors lost 3.9 billion euros ($5.6 billion) in , an Icelandic internet bank that failed in .  The two governments reimbursed their citizens and are now seeking repayment from Iceland. Iceland compensated its own citizens for losses but not overseas depositors.

The latest repayment plan took two years to work out between Britain, the Netherlands and Iceland and was passed by a 70 percent majority of the Icelandic parliament. It provided for a lower interest rate and a longer repayment period, conditions much more beneficial to Iceland than the previous plan. The cost would average about  12,000 euros before interest per Icelander. Those against the referendum felt that amount was a heavy burden on Iceland and  the taxpayer was not legally responsible for  a private bank's losses.

In a press conference, Iceland's   said, "I think it's very hard to interpret this in any other way than the fact that the Icelandic people are not prepared to accept payments or shoulder the burden unless there is a clear legal obligation to do so."  He said that Iceland can pay its debts and the country has the reserves to cover future payments. 

But Iceland's  said the referendum results were disappointing and have divided the country. She considers acceptance of the payment plan essential to Iceland's attempts to join the European Union (EU). Under an EU directive, Britain and the Netherlands are owed compensation by Iceland. The International Monetary Fund's 2009  loan to Iceland of $2.1 billion  contained the provision that Iceland repay the British and Dutch governments. Britain and the Netherlands are in a position to  block Iceland's  application for European Union membership. 

The Netherlands and Britain said the opportunity to  negotiate has passed and the dispute will end up before the , the court  for the .

British   said that the British government had fulfilled its obligation to its citizens to compensate them for their losses. "We have an obligation now to get that money back, and we will continue to pursue that until we do. ... We have a difficult financial position as a country and this money would help."

Dutch  said, "Iceland remains obliged to repay. The issue is now for the courts to decide."

The increasingly bitter dispute must be resolved for Iceland to have access to financial markets essential to fund its recovery, experts say, and resolution is essential for  Iceland's attempts to become an EU member.