Iceland PM-president may have gone too far on Icesave

REYKJAVIK Jan 5 (Reuters) - Icelandic Prime Minister Johanna Sigurdardottir said on Tuesday that it was "debatable" whether the island's president had overstepped his legal bounds when forcing a referendum on the Icesave issue.

Earlier on Tuesday, the Icelandic president refused to sign into law a bill to repay more than $5 billion lost by savers in Britain and the Netherlands, calling for a referendum and stirring fresh turmoil in the crisis-hit country.

"It is debatable whether it is politically and constitionally correct for the president to use his right to submit the issue to a national referendum when it concerns an international issue such as Icesave where the govt seeks to honour its international committments," she said in a statement.

"Uncertainty or upheaval in the formal dealings with others countries can have unforeseen wide-ranging and potentially damaging consequences for our society."