Councils have Iceland investments

Most of Gloucestershire's councils have confirmed they have investments with troubled Icelandic banks.

The county and Cheltenham borough councils have £12m and £11m deposited respectively, but each said the money was only part of extensive portfolios.

Stroud district council has £3m, Cotswold district council £2m and Tewkesbury borough £1m invested.

Paul James, leader of Gloucester city council, which has £2m invested, said he hoped the money was safe.

"Obviously, we are concerned and are watching developments very closely," Mr James said.

"But it is early days yet, these things move very quickly and we hope our money is safe.

The important thing is to wait calmly and see how the situation develops John Rawson Cheltenham council

"We'll just have to see how things develop over the coming hours and days."

Cheltenham council's cabinet member for finance, John Rawson, said: "In our case, these are fixed-term investments dating back to 2006, when the banks in question were all A-rated for creditworthiness.

"The present plight of the Icelandic banking system is a cause of concern to us, but it doesn't mean that we have lost the money or even the interest.

"The important thing is to wait calmly and see how the situation develops."

He added that in the case of the bank causing most concern, Landsbanki, the authority's investments there were not due to mature until December 2009 at the earliest.

"By this time, we would hope that the bank would either be trading again independently or would have been taken over by an international bank," Mr Rawson said.

Forest of Dean district council said it did have investments which matured in June. It said no further deposits have been made since.

The figures have been released as local authority leaders seek an urgent meeting with the Chancellor Alistair Darling.

At least 20 councils in England and Wales have money in Icelandic banks.

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