Understanding the flow of ice on the microstructural scale is essential for improving our knowledge of large-scale ice dynamics, and thus our ability to predict future changes of ice sheets. Polar ice behaves anisotropically during flow, which can lead to strain localisation. In order to study how dynamic recrystallisation affects to strain localisation in deep levels of polar ice sheets, we present a series of numerical simulations of ice polycrystals deformed under simple-shear conditions. The models explicitly simulate the evolution of microstructures using a full-field approach, based on the coupling of a viscoplastic deformation code (VPFFT) with dynamic recrystallisation codes. The simulations provide new insights into the distribution of stress, strain rate and lattice orientation fields with progressive strain, up to a shear strain of three. Our simulations show how the recrystallisation processes have a strong influence on the resulting microstructure (grain size and shape), while the development of lattice preferred orientations (LPO) appears to be less affected. Activation of non-basal slip systems is enhanced by recrystallisation and induces a strain hardening behaviour up to the onset of strain localisation and strain weakening behaviour. Simulations demonstrate that the strong intrinsic anisotropy of ice crystals is transferred to the polycrystalline scale and results in the development of strain localisation bands than can be masked by grain boundary migration. Therefore, the finite-strain history is non-directly reflected by the final microstructure. Masked strain localisation can be recognised in ice cores, such as the EDML, from the presence of stepped boundaries, microshear and grains with zig-zag geometries.