UK High Court says Kaupthing asset seizure legal

STOCKHOLM Oct 20 (Reuters) - Britain's High Court ruled that British authorities were within their rights to seize the UK assets of Kaupthing as the Icelandic bank collapsed last year, creditor representatives of the bank said on Tuesday.

The British Treasury used emergency powers granted it to transfer the bank's Internet banking business, Kaupthing Edge, to ING Direct. Kaupthing later claimed the Treasury had overstepped its authority.

"The Court considered contemporaneous documents as well as witness statements submitted by the UK Treasury and the Bank," the resolution committee representing creditors of the collapsed bank said in a statement.

"The Court concluded that, although the contemporaneous documents provided only an incomplete statement of the UK Treasury's reasoning process, it was satisfied that a proper process had been followed."

Iceland's main banks crumbled within the space of a week in October last year, leading to a collapse in the North Atlantic island nation's currency and leaving it dependent on aid from the International Monetary Fund and European neighbours. (Editing by David Holmes)