Doncaster Council, in South Yorkshire, said it has £3m invested.

Elected mayor Martin Winter said: "We are talking here about less than 1% of our total revenue budget.

"We also spread our investments so that we don't invest all of our money in one place. The Icelandic bank that houses one particular investment is 'triple A' rated, which means that it was rated independently as extremely safe.

"I am waiting to see what advice comes from Government, the Treasury and the Local Government Association."

Rotherham Borough Council, also in South Yorkshire, said it has £3.7m invested. A spokesman confirmed that the authority has £1.95m with Landsbanki and £1.80m with its subsidiary, Heritable Bank, which is based in the UK.

He said: "We can assure our residents that we will do all we can as an authority to recover the money and will work with the Local Government Association and other affected councils to encourage the Chancellor to offer the same amount of protection to local authorities as to individual investors.

"Rotherham Borough Council's annual budget is £700m and we are confident that the current situation will not impact upon service delivery."

North East Lincolnshire Council has also revealed it has £2.5m on deposit with troubled Icelandic bank Landsbanki out of a total of £90m of investments, a spokeswoman said.

Alan Madin, executive director of corporate services, said: "It is clear that deposits due in the next few weeks are unlikely to be repaid on the due date. A delay in repayment is manageable without impact on council services and the council carries a level of self insurances that would help cushion a loss should any occur."




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