The fallout from Iceland’s financial crisis continued to hit British business yesterday as companies that bank with Landsbanki, the nationalised Icelandic bank, found that they could not withdraw money from their accounts and Exista, an investment company with close links to Kaupthing, moved to sell-off its assets.

An order imposed by the Treasury and the Bank of England on Landsbanki meant that no commercial customers of the Icelandic bank could draw on its banking facilities.

Sources close to the Treasury said that the accounts were likely to be unfrozen by Monday.

Accountants in the restructuring departments of the Big Four banks said yesterday that they had been inundated with requests for advice from companies that bank with Landsbanki, Kaupthing and Glitnir, which was the first of the Icelandic banks to be nationalised.

“We’ve had dozens of calls, particularly from retailers,” one accountant said. “These companies just don’t know what to do at the moment because it’s not a good time to be looking for alternative finance.”

British businesses that bank with Kaupthing have not had their assets frozen by the Government, but City sources said that Ernst & Young, Kaupthing’s administrator, was refusing to allow some companies access to borrowings that have not already been drawn down. A spokesman for Ernst & Young declined to comment.

Exista, an Icelandic investment company that owned nearly 25 per cent of Kaupthing and whose debt for acquisitions was partly funded by the bank, sold off its stake in Bakkavor Group, a food producer that supplies Tesco.

Exista suffered a massive loss when Kaupthing was nationalised by the Icelandic Government this week and is under pressure from the Government to sell its overseas assets. Exista sold its 39.6 per cent stake to Bakkavor’s founders and directors at what is believed to be a knockdown price. It was the third disposal by Exista this week after the group sold out of Sampo, the Finnish financial services giant.

Robert Tchenguiz, who lost £1 billion in 24 hours this week when Kaupthing liquidated his holdings in Mitchells & Butler and J Sainsbury, also holds a 20 per cent stake in Exista.

On Thursday the Icelandic Government seized control of the country’s biggest bank and suspended trading on its stock exchange. The move came after British authorities had seized control of Kaupthing Singer & Friedlander, the British arm of Kaupthing, which employs almost 700 people in the City. The management of Singer & Friedlander’s stockbroking business is understood to be close to securing a deal with Ernst & Young to buy the business for 1p. The company is also looking for a merger or a strategic investor to provide it with new funds.

Yesterday Teather & Greenwood, the broking business that was sold by Landsbanki to Straumur-Burdaras, another Icelandic bank, several weeks ago said that Straumur had informed it that it would not proceed with the acquisition. The board of Teathers said that it was exploring alternative options, although, with aquisition finance almost impossible to obtain, the broker’s future looked uncertain last night.

Britain and Iceland were plunged into a diplomatic row yesterday as the two countries blamed one another for the demise of Iceland’s banking industry. The effect of Iceland’s economic turmoil is already being felt in corporate Britain.

Kaupthing had become a key player in the British economy by taking stakes not only in J Sainsbury and M&B but also a number of high street retailers, including Debenhams, the department store chain. Iceland’s banking assets amounted to about nine times its gross domestic product and its current account deficit rose to 16 per cent of GDP last year.

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