Tropical island paradise tops debt league

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The Seychelles islands in the Indian Ocean, better known for their pristine beaches and crystal clear waters, are the most indebted nation in the world, according to a new report released on Monday.

The "debt league" compiled data on government debt and private debt and looked at how much a country owes as well as how much it is owed.

According to this measure, the Seychelles tops the league of the most indebted nations, with national net debt at 152 percent of gross domestic product (GDP). In order of indebtedness, it is followed by Portugal, Ireland and Greece, countries which like the Seychelles in 2008, received international bailouts.

Published on Monday by the Jubilee Debt Campaign, a group which presses for developing countries' debts to be canceled, the league table revealed that the largest creditor country was Singapore with a net surplus of 294 percent of GDP. It was followed by Switzerland, Saudi Arabia and Norway.

Out of the 127 debtors and 36 surplus countries, the U.K. was the 98th most indebted country with a net debt of 13 percent of GDP. However, the figure for private sector foreign owed debt was 364 percent of GDP - making the U.K. the fourth most indebted country in those terms.

Jubilee Debt Campaign, which used data from the World Bank, International Monetary Fund, central banks and OECD databases for the league table, said lender countries were traditionally seen as "morally superior" to indebted countries for their credit surpluses. "But they are just as responsible for debt crises in a world increasingly characterized by huge imbalances."

(Read more: Is Germany in 'cloudcuckoo land' over Greek debt?)

"The organization believes foreign owed debt is a more important factor causing crises than domestic debt, and private debt is far more important than traditionally believed," Jubilee Debt Campaign stated.

"Though the U.K. ranks 98th most indebted country in the world in the net debt league, its private sector debt is [massive]…this means the U.K. economy is in desperate need of reform - but not of the sort of austerity policies currently being imposed," the report continued.

The economist who calculated the figures for the group said it provided a new perspective on debt. "Often when referring to a country's debt, people only focus on how much debt is owed by a government," Tim Jones remarked. "But it ignores the debt owed by private companies, including banks, even though that was the main cause of the current financial crisis."

(Read more: What Taxpayer Bailouts? Euro Crisis Saves Germany Money)

"Countries in a foreign debt crisis need debts to be canceled. But to prevent crises in the first place we need to regain control of the financial system. The U.K. debt crisis is a crisis of private debt, bank debt, and it hasn't gone away. Austerity will do nothing to help this. Instead we need to regulate lending between states, including by private companies and banks."

- By CNBC's Holy Ellyatt, follow her on Twitter @HollyEllyatt