It's been an extraordinary day in the history of the Isle of Man as an offshore finance centre.

Against a background of growing concern over the global financial crisis, it was confirmed this morning the local branch of the Icelandic bank Kaupthing Singer and Friedlander had gone into liquidation.

That was made public a few hours before Tynwald held its first emergency sitting for over 40 years, at which members unanimously supported an improved depositor protection scheme for people with money in banks in the Island.

Staff and depositors with Kaupthing attended an emotion charged meeting at the Gaiety Theatre this afternoon, at which the provisional liquidator - Mike Simpson, of Price Waterhouse Coopers - answered questions.

He assured them he would do everything he could to recover as many of the bank's assets as possible (audio file attached):

"People are understandably very concerned. They've put their savings into a bank and there is a real possibility they are not going to get all their money back.

"I've been appointed today by the Isle of Man High Court, as liquidator provisionally, in order to protect the assets and gather in the assets that I can, in order to try and meet those liabilities to depositors.

"It's day one, it's early days and I have to say I don't know how successful I'm going to be in doing that at the moment."

Tonight the customers of Kaupthing Singer and Friedlander in the Isle of Man still don't know how much of their money they will get back.

Nor do they know whether they will be claiming compensation under the old depositor protection scheme - guaranteeing up to ?15,000 - or the new one, passed today, which pays out up to ?50,000.

No announcement is expected on that until after a winding-up order has been made, later this month.

The matter is likely to be further debated when Tynwald has it's regular October sitting, in two week's time.