The administrators to the UK arm of Kaupthing Singer & Friedlander, the collapsed Icelandic bank, have doubled a planned payment to £250 million to bondholders, but continue to reject a separate claim.

Ernst & Young, the administrators to Kaupthing Singer & Friedlander's UK operations said today that they planned to pay out 20p in the pound to creditors holding £250 million of guaranteed floating rate notes by the end of July.

In May, the administrators said that all creditors would receive at least 10p in the pound as long as they could prove they were owed money.

Kaupthing Singer & Friedlander collapsed into administration in October at the height of the Icelandic banking crisis, raising a question mark over about £850 million of deposits held by 11,000 customers. It was formally put into liquidation in May.

One of Kaupthing Singer & Friedlander's administrators said today that the payment to the holders of the floating rate notes had been approved, but he was unable to comment about the position of other creditors.

A spokeswoman for Ernst & Young said that it was the first payment to be made since the administration. She said that Ernst & Young hoped to make further payments later this year.

The administrators added that they had rejected a further claim by creditors and had gone to the High Court for advice about the payments.

It is not clear whether today's offer has any implications for Kaupthing Singer & Friedlander savers on the Isle of Man, who have mounted a vocal campaign to try to get their money back from the bank.

The Manx Depositor Compensation Scheme, the Isle of Man scheme for creditors that was triggered by the May liquidation, said late last month that three out of four Kaupthing Singer & Friedlander savers should be repaid in full.

But they warned that the payouts would be limited for the holders of £300 million of life assurance bonds.

Under the Manx DCS, eligible customers will receive up to £50,000 each. But those holding life assurance bonds will have their payouts limited to £20,000 per company, life assurance company, or trust invested.

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