Page last updated at 06:20 GMT, Friday, 17 October 2008 07:20 UK

Talks on retrieving Iceland cash

Landsbanki branch
UK councils had invested 858.3m in Icelandic banks

Scottish Secretary Jim Murphy will hold talks with local councils and the UK Treasury to discuss how to retrieve funds stranded in Icelandic banks.

Local authorities across the UK, including several in Scotland, had invested a total of 858.3m in the banks, which has since been frozen.

Scottish councils were not hit as hard as those in England.

Earlier this month a Treasury spokesman said any assistance for Scottish councils should come from Holyrood.

But, while the sums of money involved were considerably less in Scotland - in the region of 30m - there was still concern over when any of the investments would be returned.

Councils in North Ayrshire, Scottish Borders Council, South Lanarkshire, East Ayrshire, South Ayrshire, Moray, Perth and Kinross and East Renfrewshire held funds with Icelandic banks.

It also emerged that a 120m project to build or refurbish 10 Aberdeen schools was being funded by money from the collapsed Landsbanki bank.

Mr Murphy will broker a meeting with local authority umbrella group Cosla and Treasury officials later.

It is also envisaged that Cosla could join discussions with the Local Government Association (LGA) in England when it holds talks with the Treasury.

The government has frozen the UK assets of Icelandic bank Landsbanki, saying local authorities would benefit from this.

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