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British supermarket Iceland could face a legal battle to save its name after the Icelandic government confirmed it is considering launching legal action.

The firm, which specialises in frozen food and has its head office in Deeside, Flintshire, has been trading under the name for 45 years.

It , which would be the focus of any legal challenge.

But it said it was not aware there had ever been cause for public confusion.

A spokesman for firm Iceland said: "Iceland Foods has traded under the Iceland name in the UK since 1970, and is today one of the UK's most recognised brands.

"We have also traded as Iceland for many years in other EU countries, and in non-EU countries, including Iceland itself.

"We are not aware that our use of the Iceland name has ever caused any confusion with Iceland the country."

The Deeside company has over 800 stores across the UK and employs more than 23,000 staff.

But officials in the North Atlantic country are considering legal action.

Unhappy traders

A spokesman for Iceland's Ministry of Foreign Affairs said on Friday: "I can confirm that this is being looked into, but no decision has been made."

Businesses on the island claim they are being prevented from promoting their own goods and services the include the name of their homeland because of the trademark registration across Europe.

"We didn't make any objections in the beginning, as we were never going to be running any supermarkets," said Jon Asbergsson, who is head of the trade and tourism body, Promote Iceland.

"But over the course of the years they have been registering the name in several other categories and companies that have Iceland in the name, they (the supermarket) have been objecting to them using the word Iceland in their names or logos."

Bergthora Halldorsdottir, a lawyer who works for Business Iceland, added: "We are contemplating whether it is fair to be able to trademark the name of a country without its inhabitants having any say in the matter."