West Sussex County Council has admitted it has a £12.9m investment in Heritable, the British banking-licensed subsidiary of Iceland-based Landsbanki.
And Winchester City Council, which covers parts of Wickham, Whiteley and Denmead, has an invest
ment of £1m with the same bank due for repayment on March 16 next year.
West Sussex's money is due for repayment to the council over the next 12 months
Landsbanki has been placed in receivership which has had a knock-on effect on Heritable.
Heritable has been put into administration and all of its accounts frozen.
Council leaders are hoping the government will bail out Heritable as part of its measures to support the UK banking system.
In a statement to reassure taxpayers, West Sussex council said: 'While the turmoil in the financial markets is a matter of considerable concern, with a revenue budget of more than one billion pounds, this sum of money does not impact upon the day to day business of the county council.
'Along with other local authorities and the Local Government Association, we will continue to monitor the situation closely.'
Portsmouth, Fareham, Gosport, Havant and Hampshire councils have confirmed they have no money invested in Iceland-based banks.
Cllr George Beckett, leader of Winchester City Council, said: 'The council uses external treasury management advisors and took account of the good credit rating of the bank at the time the investment was made.
'The Treasury Management Strategy is based upon national guidance from the Department of Communities and Local Government.
'The council supports the representations by the Local Government Association to the Chancellor of the Exchequer to protect the interests of tax payers.'
The full article contains 295 words and appears in The News newspaper.
