Council's �42m in Icelandic banks

Nottingham City Council has �42m invested in collapsed or financially threatened Icelandic banks - the second highest total in the UK.

Council leader Jon Collins said the situation was worrying but the council was working to recover the money.

Councils across Britain have invested more than �840m in Icelandic banks and are unsure whether these sums will be guaranteed by the government.

The Local Government Association said frontline services were not at risk.

Regional investment

"The [�42m] is out of a total annual investment we have of about �175m so, as it stands, that money is of a concern to us," said Mr Collins.

"We're working with the Local Government Association and other councils with our local MPs to make the case for local authorities to get the same kind of protection as individual investors."

Prime Minister Gordon Brown said he was considering "further action", but added that the government was not offering to guarantee authorities' deposits with Icelandic banks.

Deputy council leader Graham Chapman said: "We are not panicking and certainly the immediate effect will not be an massive rise in council tax."

He said the council had a �1bn turnover annually, adding that the Icelandic banks were "all credit-rated".

Elsewhere in Nottinghamshire, Bassetlaw District Council has invested �8m in Icelandic banks and Newark and Sherwood �2m.

Serious consequences

In Lincolnshire, West Lindsey District Council has confirmed it has �7m invested, while East Lindsey District Council said its total was �4m.

Charnwood Borough Council in Leicestershire had �1m in a subsidiary of the Icelandic bank Landsbanki.

Rutland County Council said about �1m was invested.

In Derbyshire, the High Peak Borough Council has investments of �2m with Landsbanki and its UK subsidiary Heritable Bank.

High Peak deputy leader Emily Thrane said: "Two million pounds is a great deal of money to a district council of High Peak's size, and without government intervention, the effect of losing such a sum would have serious consequences to council services."