IMF withholds backing for Iceland loan deal: report

STOCKHOLM (Reuters) - The International Monetary Fund is withholding its backing for a loan to struggling Iceland, the Financial Times reported on Wednesday without citing sources.

The North Atlantic island, an early victim of the global financial crisis, made a provisional deal for a $2 billion loan from the IMF on October 24, but the deal has still not been approved by the fund's board which has postponed the decision on the loan application several times.

On top of the IMF money, Iceland has said it wants an additional $4 billion from other lenders and has held discussions with its Nordic neighbors, Russia, Japan and the European Union.

"An international bail-out of crisis-hit Iceland appeared to be unraveling last night as the International Monetary Fund withheld official backing," the FT said.

The paper said the decision had "now been put back to an unknown date" and that no explanation for the delay had been provided by the IMF.

IMF said on October 30 that a meeting to decide on an Iceland deal was provisionally scheduled for November 5. On November 6, Iceland's Prime Minister Geir Haarde said the fund would meet on the matter on November 10.

(Reporting by Anna Ringstrom, editing by Mike Peacock)