A Chinese tycoon wants to buy a huge tract of land in Iceland for a $US100 million ($A93.85 million) eco-tourism project that will include a golf course, the Financial Times said Tuesday.
Huang Nubo, a real estate investor and former government official, has sealed a provisional deal to acquire 300 square kilometres of Icelandic territory, the newspaper said.
However Iceland's interior minister stressed that, under Icelandic law such a sale of land, part of which is owned by the state, to a foreign entity would be illegal.
For it to become possible a special exemption from the law would be required, minister Ogmundur Jonasson said in Reykjavik.
That would require, as a first step, a letter to the ministry and "we haven't received such a letter," he added.
"It doesn't get sold just because there is a high offer," he added, without putting a price on the land.
"It hasn't gone unnoticed by anybody that the Chinese are buying up land in the four corners of the world," he said, while insisting that ethnicity was not the issue.
Iceland occupies a strategically important location between Europe and North America and has been touted as a potential hub for Asian cargo should climate change open Arctic waters to shipping.
Forbes ranked Huang as China's 161st richest man in 2010, with a net worth of $US890 million ($A835.29 million). His company, Zhongkun Group, owns resorts and tourist facilities across China and around the world.
A spokeswoman for Zhongkun Group in Beijing refused to comment on the reported deal when contacted by AFP, but said Huang would hold a press conference in the capital on Friday.
The Financial Times said Huang had previously worked at China's Central Propaganda Department and the Ministry of Construction.
The Iceland Review Online reported last week that Huang signed a deal with land owners including the Icelandic government last Wednesday, and that the deal was dependent on approval by both China and Iceland.
Iceland's booming economy collapsed in 2008 when its hugely overstretched banking sector plunged suddenly into crisis and its three major banks collapsed within a matter of weeks.
Since then, the country has gone through much soul-searching and a string of painful changes to put its house in order, helped by an International Monetary Fund rescue.
On Friday last week, the IMF approved the final release of funds in its $2.25 billion bailout programme for Iceland.
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