REYKJAVIK, Iceland - Icelandic police arrested five demonstrators as several hundred people protested outside parliament Monday against Iceland's deal with Britain and the Netherlands over the online bank Icesave.

Police estimated more than 400 protesters were objecting to the deal, under which Iceland agreed to pay back the 3.8 billion euros (S$7.7 billion) the two countries gave it to help bail out their own nationals who lost money in the bank's collapse.

Iceland nationalised Icesave, a subsidiary of the country's second largest bank Landsbanksi, in October leaving more than 200,000 British savers and 120,000 Dutch clients cut off from their money.

Icelandic assets in Britain were frozen in response.

"Don't ruin us!" shouted some protesters, while others chanted "Iceslave!" to denounce the government's decision.

The payments, with interest, as they are being treated as a loan, will be made between 2016 and 2024.

Aldis Karsldottir, a retired woman in her 60s, told AFP: "We can't pay for this and my children can't pay.

"We have a left-wing government now but they are no better than the last one," she added.

"It's a nonsense," said Birgir Bjorgvinsson, a fisherman in his 50s.

"We have to stop it."

Prime Minister Johanna Sigurdardottir's Social Democrats lead a coalition government with the Left Green Movement after scoring a historic election victory on April 25, over the conservative Independence Party.

The Independence Party, which had faced street protests over its handling of the economy, was ousted after 18 years in power.