The United Kingdom has offered more flexibility to reach a deal with the government of Iceland for about £2.3 billion that the island nation owed it since the collapse of the online savings bank Icesave.

Chancellor, Alistair Darling has said that Britain is "prepared to be flexible" even as the people in Iceland overwhelmingly voted 'NO' in a referendum to decide the deal in which the country will pay its debt.

Finance minister Alistair Darling’s plans to put off spending cuts got a boost when more than 60 leading economists said public spending cuts should be delayed to support the fragile economy.

Earlier in December, Mr. Darling had announced that spending cuts held up until 2011. But, at that time several critics saw the announcement as Labour’s tactic to attract votes in general elections due by June.

The Government’s latest annual budget, to be announced in March, will focus more on growth than sternness to deal with the deficit. It will be made public, before the country’s general election takes place.

The Finance Minister Mr. Alistair Darling revealed that the main concern of the budget will be “growth” as the ruling party seems to maintain power in elections due by June.

Darling says, "I will take steps to provide the country with a strong platform to generate opportunity and jobs in the future".

Chancellor Alistair Darling said on Friday that the UK is on track to sustainable economic growth and banking reforms are vital to make it successful.

Mr. Darling called for a quick agreement on regulatory changes to keep up momentum emerged after the recent economic crisis.

He said higher capital requirements are also required, but he added that proprietary trading is only a small fraction of what several banks do.

He stressed on international agreement is necessary to insure taxpayers against a future financial crisis.

Public sector employees may see a cut in their pays & bonuses as Chancellor Alistair Darling has said that public sector should follow private sector as far as pays & bonuses are concerned.

Mr. Darling said public sector employees should accept a reduction in pas & bonuses if they want to remain on to their jobs.

He said that figures showed that the private sector workers accepted wage cuts and held on to their jobs.

Chancellor Alistair Darling has said that the British government has plans to impose US-style levy on British banks to repay taxpayers for huge bailouts.

US President Barack Obama has plans to impose 0.15 per cent charge on liabilities of the financial institutions.

But, Mr. Darling said Britain would not follow the US as the US was doing something different. He added that the UK had purchased shares in the troubled banks which could be sold in future. However, he did not provide any deadline for the sale of Government's stake in banks.

A cross-party group of MPs criticized Chancellor Alistair Darling for lack of clarity on debt-cutting strategy.

The Treasury Select Committee, which expressed discontent over Alistair Darling’s last month pre-budget report, warned that the Government must work out clear plans to tame 178 billion budget deficit sooner than later.

The group of MPs also said that its expert witnesses were disapproved of pre-budget report as it did not provide sufficient details.