Coun Colin Clark, Cabinet member for Finance and Resources, said:

"South Ribble Borough Council has a number of investments which are spread across many different financial institutions. These investments provide significant income that contributes to our annual budget and helps keep the Council Tax low for local people.

"Investment is based on a regular risk assessment, which includes independent specialist financial advice. This follows national best practice among local authorities and is an approach recommended by the Government.

"We currently have £5m invested with Landsbanki, the Icelandic bank group. The bank's assets were frozen yesterday. Landsbanki was considered an excellent investment option for South Ribble and many other councils because of its high rating within the financial sector.

"We are working with other local authorities and the Local Government Association to lobby the Government to guarantee our investment.

"I would also reassure residents that we will continue to do everything possible to bring this issue to a positive conclusion during a very uncertain and unforeseen time. The situation is changing rapidly and we will issue further information as soon as we can."