Council chief defies Iceland vote

Mr De Freitas said the council had made money on other investments

The leader of North East Lincolnshire Council has refused to resign despite losing a confidence vote over the authority's investments in Iceland.

In June, an Audit Commission report criticised the council for putting £7m into failing Icelandic banks.

A motion demanding the resignation of council leader Andrew De Freitas was passed by one vote on Thursday night.

Mr De Freitas, the Lib Dem leader, said he would not quit because investments were not his responsibility.

"No leader of the council in any authority has resigned over this because it was always accepted that the day-to-day running of the treasury management is delegated to a group of officers," he said.

'Money at risk'

He acknowledged that "someone had made a very big mistake" by allowing the investments to go ahead in Landsbanki and Kaupthing Singer and Friedlander banks just before they collapsed in October 2008.

"That individual or individuals have been dealt with through the normal process in local government," he said.

Mr De Freitas said the council's portfolio of investments had generated £10.6m of earnings over the past four years.

"I am not saying it is right to have put money at risk, but the team of people who have worked hard for many years have done well for this area."

Labour group leader Chris Shaw, who tabled the motion of no confidence, said he still believed the leader and his deputy Tony McCabe should step down.

"We have started the ball rolling," he said. "There are ways now to push forward what we want, which is really the leader and deputy leader to go."