More than £66m of public money from Welsh councils and police bodies is tied up in investments with Icelandic banks now in receivership.
Eight Welsh authorities and three police authorities have invested in Icelandic banks or their subsidiaries.
Neath Port Talbot and Caerphilly councils have the largest amounts at £20m and £15m respectively.
Local authority leaders are calling for an urgent meeting with the Chancellor Alistair Darling.
The UK government has frozen all the British assets of Landsbanki.
It follows the decision by Iceland's government to take over the company, which ran the internet bank Icesave, leaving 300,000 UK residential customers unable to access their savings.
Neath Port Talbot - £20m
Caerphilly - £15m
Ceredigion - £5.5m
Powys - £4m
Gwynedd - £4m
Flintshire - £3.7m
Rhondda Cynon Taf - £3m
Monmouthshire - £1.2m
Gwent Police Authority - £1m
South Wales Police Authority - £7m
Dyfed-Powys Police Authority - £2m
Source: BBC Wales' Dragon's Eye
Neath Port Talbot council has a total of £20m invested in the Icelandic banking system, with £8m in two banks and a further £12m in the UK subsidiaries.
The council's corporate director of finance Derek Davies said: "The council is concerned and we are carefully monitoring the situation. It is too early to say what the ultimate level of risk is with these investments."
Caerphilly has £10m invested with Heritable Bank, a UK subsidiary of Landsbanki and £5m with Landsbanki.
The council said it was deposited for a period of three months and the authority said it was looking at all avenues to recover the money. It said there would be no immediate effect on council services.
Ceredigion council has £5.5m in Icelandic banks.
Powys council and Gwynedd council have £4m each; Flintshire council has confirmed that it had banked £3.7m with the institutions, while Rhondda Cynon Taf had deposited £3m.
It is also known that Monmouthshire council had accounts worth £1.2m and Caerphilly council has an undisclosed amount invested.
Gwent Police Authority has £1m invested and neighbouring South Wales Police Authority £7m. Dyfed-Powys Police Authority, meanwhile, has £2m deposited in UK subsidiaries of Icelandic banks.
South Wales Police Authority said its investment was split between £3m in Landsbanki and £4m in its subsidiary Heritable.
A spokesperson said "by no means is this money lost" and pledged front line services will not be affected.
A spokesman for the Welsh Assembly Government said: "Welsh ministers are aware of the issue.
"Investment policy is a matter for individual local authorities and fiscal issues arising from the credit crunch are matters for the UK government.
"We understand that the Welsh Local Government Association has requested a meeting with the chancellor to discuss the issue. We will await the outcome of discussions at a UK level."
Conservative local government spokesman Nick Ramsay said: "It is all in our interests to ensure council finances and council services are not put at risk."
Liberal Democrats called on the UK government to guarantee local authority funds held by Icelandic banks.
Lib Dem Jenny Randerson said: "Having bailed out the banks, and rightly agreed to to protect individual British savers, the precedent has been set by the chancellor, so why should local government be any different."
A number of English councils also have money invested.
A spokesperson for the Welsh Local Government Association (WLGA) said the situation was being "carefully monitored".
In a statement, the WLGA added that councils are "clearly concerned at the security of their investments but it is too early to say whether they are at risk".
It added: "The local government associations around the UK have now made direct approaches to the Treasury to get the Chancellor to provide the necessary cover for public sector investments which have been undertaken in accord with normal practice."
The Local Government Association, which represents all 400 councils in England and Wales, said it did not expect significant financial problems for local authorities in the short term.
One senior Welsh council official, who did not want to be identified, told Dragon's Eye: "It's going to be a long time to work out the ramifications of this - in the meantime, it is very worrying."
Prime Minister Gordon Brown has condemned Iceland's failure to guarantee British savers' deposits in the country's banks.
Mr Darling has said that he will ensure all UK savers with accounts with the closed internet bank Icesave will get all of their money back.
But the position with corporate investors, such as councils, is less clear.
Fourteen Welsh councils say they have no such investments - Anglesey, Blaenau Gwent, Carmarthenshire, Conwy, Denbighshire, Pembrokeshire, Newport, Swansea, Torfaen, Merthyr Tydfil, Wrexham, Cardiff, Bridgend and Vale of Glamorgan.
Dragon's Eye begins its new series on Thursday 9 October on BBC 2W at 2100 BST and on BBC One Wales at 2235 BST.
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