Statement released following the Icelandic bank account freeze

There is an estimated £1bn in council assets invested in Icelandic accounts and so far there have been no guarantees that the money will be returned.

In the statement the Local Government Authority reported that 108 councils have deposited £798.95m in Icelandic banks.

The statement said that:

"The Government and the LGA agreed that there is no evidence of recklessness by local authorities." It added that: "For those local authorities who are facing severe short term difficulties Government and the LGA will agree an appropriate set of ways to assist. We will judge what is appropriate on a case by case basis.

“The Local Government Authority and the Government will continue to monitor the situation closely."