Millions of pounds worth of taxpayers' money could be lost because of the collapse of three Icelandic banks.
Hertfordshire County Council has a total of £28 million tied up in Icelandic banks - £17 million in Landsbanki and Heritable, £7m in Glitnr and £4m in Kaupthing.
Hertfordshire Police Authority also revealed that they invested £3 million in the re
cently-collapsed bank.
The figure of £28 million equates to 8.2 per cent of the council's investments, which total £304 million.
The council is unsure whether or not they will see any of their money again, though the Local Government Association wants the Government to guarantee the money.
A spokesman said: "We are waiting for developments.
"It's really too early to say what will happen to the money but we are doing everything we can to make sure everybody's money is secured."
As well as the money invested in Iceland, the council revealed that they have millions more tied up in around 50 foreign and UK banks.
"These change from day to day but are all rated as safe and are part of a list which is drawn up with ratings agencies," the spokesman added.
"We review the risks of any investment we make in order to protect public money."
The council claims that if the money was to be lost, it is not an amount that would have to be recouped straight away.
"That £28 million gap wouldn't be immediate," the spokesman added.
"In the event that we couldn't recover the money we would try and lessen any impact.
"It wouldn't all be missing in one go - some of the things we wouldn't have to take back for years.
"We are good with money. It would be a case of spreading that by looking at any savings we could make.
"It would be a problem but not a crisis. We do not want the impact to be put on the council tax payer."
Meanwhile Dacorum Borough Council has moved to reassure taxpayers that their money is safe.
A spokesman said: "Dacorum Borough Council is reassuring residents that it has no money invested in Icelandic Banks.
"The council has a robust strategy in place which governs how it manages its investments.
"To limit our exposure to risk the money we have invested is spread between 18 different financial institutions, the majority of which are UK or Irish Banks.
"The money we have invested changes on a daily basis as we withdraw money to pay bills and recoup income owing to us.
"Given the current financial uncertainty we are taking an increasingly cautious and prudent approach to our investments.
"Any new investments are being placed with UK banks or with Irish Banks where there are government guarantees in place."
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