Submarine cable operator Farice has signed a £12m deal with networking company Thus for a high-bandwidth internet connection between UK businesses and datacentres in Iceland.

Farice is encouraging its customers to take advantage of the potential for using "green" datacentres in Iceland - facilities that use natural geothermal sources of energy - to host their systems.

Thus will provide the connection from northern Scotland, where the Farice cable lands, to London.

Gudmundur Gunnarsson, chief executive at Farice, said, “As we develop the datacentre and server farm industry in Iceland, we are giving businesses the chance to boost their green credentials while saving them money."

A Gartner report last year found that many businesses will have to re-site datacentres over the next four years as equipment becomes increasingly power hungry.