It follows news that the UK arm of the Icelandic group has been placed into administration.

The board of KSF Isle of Man held a meeting yesterday as depositors queued outside to try to find out information.

Kaupthing Singer & Friedlander (Isle of Man) Ltd, a licensed bank in the Island, is directly owned by Kaupthing Bank hf of Iceland. It is not formally part of the UK sub-group.

But it has a 'significant business relationship' with Kaupthing in the UK.

The website of KSF Isle of Man yesterday put up a message for customers apologising for the difficulty in trying to get through on phone lines.

A spokesman for the Financial Supervision Commission revealed this morning: 'Following consultation with the Commission, the Board of Kaupthing Singer & Friedlander (Isle of Man) Limited has notified the Commission that it has passed a resolution that the company be wound up.

'In order to protect the interests of depositors a joint petition is to be presented to the Court today for the appointment of a liquidator provisionally. The Commission has suspended the banking licence of Kaupthing Singer & Friedlander (Isle of Man) Limited with immediate effect.

'The scheme manager of the Depositors' Compensation Scheme will meet as soon as appropriate to consider the activation of the Scheme. Once the Scheme is activated depositors will be contacted and invited to make a claim.'

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