Authorities have £17.5m at risk

Wokingham Borough Council has invested £5m in the troubled banks

Three Berkshire councils and Thames Valley Police Authority have a total of £17.5m in troubled Icelandic banks, it has been revealed.

The police authority said it had a £5m loan deposited with Landsbanki, which is due for repayment in May 2009.

It said it did not expect any short-term impact on front-line policing.

Wokingham and Bracknell councils said it each had £5m invested in the troubled banks while Slough Borough Council said it has £2.5m at risk.

Wokingham Borough Council has £2m invested in Landsbanki and a £3m investment in Heritable, a subsidiary bank.

Bracknell Forest Council has deposits totalling £5m in Heritable and Glitner.

Chief executive Timothy Wheadon said: "We are always very careful where we invest our money and use strict criteria in selecting banks based on their credit rating scores.

"We are not currently expecting any impact on any of our council services."

Slough Borough Council confirmed £2.5m was invested with Heritable in March 2007 for a period of three years when the bank was "A listed".

The cash represents 2% of the council's total investments.

A spokeswoman said: "The council only invests in 'A' rated banks from a government approved list."

Thames Valley Police Authority, which has £5m at risk, said: "Discussions between the Association of Police Authorities, the Local Government Association and central government are continuing to seek a solution to protect public sector services in the long-term."

We can assure residents that we will continue to strive to ensure that local residents do not lose out Wokingham Borough Council spokesperson

It said a report on the matter will be given to the authority at its next meeting on 25 October.

Wokingham Borough Council, which also has £5m invested, said: "The council is doing everything in its power to ensure it recovers its investment."

The £5m deposits were 5% of the council's overall £95m investments, the spokesperson said.

At the time of the investments, the council's policy was to only invest in "highly secure organisations and both banks concerned had high financial security ratings", the spokesperson added.

"Wokingham Borough Council takes its responsibilities to its residents very seriously, but could not have foreseen the extent of this current financial crisis."

The councils and police authority are backing the Local Government Association's call for the chancellor to protect council deposits.

Councils in Windsor and Maidenhead, west Berkshire and Reading said they did not have any money in the affected banks nor did Berkshire Fire and Rescue Service.

More than 100 local authorities have more than £840m at risk after investing in Icelandic banks.

Gordon Brown said he was considering "further action", but the government is not offering to guarantee the deposits.

The LGA insisted that all the councils involved had enough money to ensure that frontline services should not be affected.

But it wants the same protection for councils that was given to personal customers of Icesave and other failed Icelandic banks.