Iceland’s fishing industry is under severe pressure as a result of the country’s banking crisis, producers are warning. The freezing of bank accounts in the Nordic country – which is one of the major exporters of Atlantic cod to the UK – has made it increasingly difficult for fishermen to operate, according to sources within the trade. UK fish importers, who usually pay their foreign suppliers promptly, were having difficulty sending money back to Icelandic fishermen due to the banking restrictions, said Steve Norton, chief executive of Grimsby Fish Merchants’ Association.

There were fears that Icelandic trawlermen could go out of business if the situation wasn’t resolved soon, added Grimsby Fish Market chief executive Martyn Boyers. Icelandic fishermen were also reliant upon loans from their domestic banks, which were currently not available. Seafish argued the UK market would be damaged if there wasn’t a resolution to the situation soon.

“Sources report fish is being sold on the Iceland fresh fish market that would otherwise have gone to UK customers and some is being frozen and put into stock for later sale,” it said.

Concerns in the UK have been echoed in Iceland. The Federation of Icelandic Fishing Vessel Owners said that some Icelandic fishermen were now actively directing their vessels away from white fish species that were traditionally ­popular in the UK, which has imposed more onerous trading conditions, and ­towards species more popular in other world markets.

“This is definitely affecting the fishing industry”, said Friðrik J Arngrímsson, the federation’s chief executive, adding that some Icelandic operators were owed millions of pounds. He called for a swift resolution to the crisis to allow fishermen to continue operating. However, the Food and Drink Federation insisted the ongoing problems would not have a wider impact on the overall UK fish supply chain.