(CNN) -- Iceland's voters overwhelmingly rejected a deal to pay billions of dollars it owes to the United Kingdom and the Netherlands, the Foreign Ministry said Sunday.
With around 90 percent of votes counted, just over 93 percent said no and just under 2 percent said yes. Not enough votes remain to be counted to change the result. Some 62.5 percent of Iceland's roughly 200,000 register voters cast ballots, the ministry said.
The referendum was on a law about repaying the Netherlands and UK, which helped savers in their own countries who lost money in a failed Icelandic Internet bank.
The British and Dutch governments came up with more than $5 billion for bailing out people who lost money in Icesave -- an online retail bank branch of Landsbanki. That Icelandic bank failed in October 2008, along with two other banks in the country.
Under a European Union directive, Iceland now owes compensation to Britain and the Netherlands. The Icelandic government has said it will honor its international obligations.
Iceland's parliament passed a bill authorizing a state guarantee for repayment of the funds, but President Olafur Ragnar Grimsson declined to sign it in January. He cited public disapproval, and in particular, an Internet petition signed by up to one-quarter of the electorate, as a reason for not signing the bill. He said there needed to be a national consensus in addressing the issue.
That prompted Saturday's national referendum on the law.
The Icelandic public widely disapproved of the deal, the government said in a fact sheet on the deal. "There is widespread frustration over the claim on ordinary citizens in Iceland to pay the price for the irresponsible behavior of reckless bankers," it said.
Magnus Arni Skulason, who campaigned against the bill, called the terms of the loan repayment unacceptable.
"Of course we feel empathy for those people that lost money," he said Saturday while voting was going on. "We just want to get a more reasonable agreement," he told CNN.
It is not clear what happens now that voters have said no to the loan guarantees.
The International Monetary Fund loaned Iceland $2.1 billion in November, and said repaying the money to the British and Dutch governments was a requirement of the loan.
Iceland has begun moves toward applying for European Union membership, which Britain and the Netherlands could block.
Britain spent £2.3 billion ($3.69 billion) last year to cover the losses that British savers incurred when Icelandic banks collapsed.
The Dutch government spent €1.3 billion ($1.87 billion) to cover bank losses in the country.
The Icelandic government said it has "clearly stated its intention to honor its international obligations and remains fully committed to implementing the bilateral loan agreements with the UK and the Netherlands."