Portsmouth City Council says it will no longer invest in Qatar over human rights concerns after FOI request reveals £15m in bank

Tens of millions of pounds held by the council has been deposited with Qatar National Bank over the last five years as part of its 'treasury management' work aimed at increasing the value of its financial holdings.

But the council has now agreed to change its policy to take into account the actions of a country's government when deciding whether to invest in a state-owned financial institution.

Once its final three deposits - totalling £15m - mature by February, the council will no longer have any money held by Qatar National Bank, 50 per cent of which is owned by the country's sovereign wealth fund.

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Portsmouth City Council's fund balance stands at just under £250m, according to its most recent treasury management strategy document.

A freedom of information request submitted by the Guardian found it had invested £60m with the bank over the past five years - the ninth-largest sum deposited by any UK local authority.

The newspaper said the bank had helped fund the World Cup, including financing the Education City Stadium, which will host nine matches.

Qatar has come in for significant criticism for its human rights record with homosexuality being illegal and concerns raised over its treatment of women and migrant workers who helped build its infrastructure.

Speaking at Tuesday's meeting of the council's cabinet, its director of finance Chris Ward said it has 35 different requirements - four of which relate to 'human capital' - before investing its money in any financial institution but that these did not take into account any organisation's links to its government.

'In the instance of Qatar National Bank, the screening process is not set up to to identify that that particular institution is 50 per cent state owned and then use that to set a rating around its human rights responsibilities,' he said. 'Any evaluation that's undertaken is undertaken on the institution. It's not undertaken on the on where that institution is domiciled.'

However, in wake of these concerns, an extra 'screening process' has been added to its procedures to identify any institutions with 'significant' government influence.

A cabinet report said this meant that 'the council will not renew or place any further treasury management investments with the Qatar National Bank'.

The move has received cross-party support from councillors who said human rights and environmental issues needed to be prioritised in investments.

'We have sought to avoid places where people are so badly abused,' councillor Lee Hunt, a member of the Lib Dem cabinet said. 'I don't have a say over where the World Cup is held but I do have a say about Portsmouth money and I don't want to see money invested in places like that.'

Councillor Charlotte Gerada, the deputy leader of the Labour group, said she 'welcomed' the decision to review the council's investment policy.

'While we want the council to make sound financial investments that make returns to help fund vital services, we also want to achieve peace of mind about how these investments are being used,' she said. 'Human rights and environmental considerations should be front and centre of any investment decision made by the council.'

Conservative group leader Simon Bosher said he supported the move 'in principle' but criticised the lack of any consultation by the Lib Dem administration with a report only emailed to councillors at 5.30pm on Monday.

'Gerald Vernon-Jackson (the council leader) likes to trumpet transparency yet yet another decision has been by him in a very opaque way,' he said. 'I support this in principle but it should have at least been discussed at a leaders' meeting.'