Nato has decided to cancel RAF air patrols over Iceland that had been due to take place next month.

The Icelandic Prime Minister, Geir Haarde, and the Foreign Minister, Ingibjörg Sólrún GÍsladóttir, insist that the decision has nothing to do with the political and monetary conflict with London.

There can be little doubt, however, that the cancellation of a routine military exercise is related to the current public mood in Iceland and the country’s dire financial situation, as Iceland bears some of the cost of those Nato exercises.

The issue of British fighter planes patrolling Icelandic air space next month has been hotly debated. Last Thursday Össur Skarphéðinsson, then acting Foreign Minister, said that having British fighter jets circling above Iceland in the coming weeks would feel like “kissing the rod of those who are beating you”.

Other ministers have taken a more diplomatic approach. The Prime Minister said yesterday the decision to cancel had been taken “for reasons best left to Nato to explain”, adding that it was unrelated to Icesave, the failed Icelandic internet bank in which hundreds of thousands of British savers held accounts. Mr Haarde admitted, however, that Nato had taken “the present political situation between the two countries into consideration”.

Until two years ago America had a military base in Iceland. Russia has recently tried to rekindle ties with the country as the melting polar icecap is expected to open important trade routes and mineral reserves.

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