The myelinated nerve fibre is formed by an axon and Schwann cells or oligodendrocytes that sheath the axon by winding around it in tight myelin layers. Repetitive stimulation of a fibre is known to result in accumulation of extracellular potassium ions, especially between the axon and the myelin. Uptake of potassium leads to Schwann cell swelling and myelin restructuring that impacts the electrical properties of the myelin. In order to further understand the dynamic interaction that takes place between the myelin and the axon, we have modelled submyelin potassium accumulation and related changes in myelin resistance during prolonged high-frequency stimulation. We predict that potassium-mediated decrease in myelin resistance leads to a functional excitation block with various patterns of altered spike trains. The patterns are found to depend on stimulation frequency and amplitude and to range from no block (less than 100 Hz) to a complete block (greater than 500 Hz). The transitional patterns include intermittent periodic block with interleaved spiking and non-spiking intervals of different relative duration as well as an unstable regime with chaotic switching between the spiking and non-spiking states. Intermittent conduction blocks are accompanied by oscillations of extracellular potassium. The mechanism of conductance block based on myelin restructuring complements the already known and modelled block via hyperpolarization mediated by the axonal sodium pump and potassium depolarization.