Surprised Sam Tana said: "Channel 4 news have been reporting doubts about Iceland's banks since March this year. What were these council accountants playing at?"

An even more surprised Graz said: "This is a revelation . . . I never knew councils were investing our council tax money into foreign banks.

"These councils have obviously used the off-shore banks for higher interest rates, tax loopholes etc.

"My question is does the public see any of the extra cash…I think not. I suspect it is creamed by our leaders to pay their own expenses, bonuses etc."

Many readers slammed the council for having money tied up in investments while increasing council tax and reducing services due to shortfalls in revenue.

Jollypostie said: "Millions sitting in foreign bank accounts but no money for playground upkeep, free bus travel for the elderly, homes for the elderly, road repairs, weekly bin collections – the list could go on and on."

Brigpnefan, from Preston, called for serious action: "If the council taxpayers lose out on this fiasco, all bosses and accountants involved should be sacked."

But there was support for the council from posters including Dreddnought: "What's obvious from reading almost all of these posts is that none of you have the slightest clue of how local government finance works, yet you all assume that you do and therefore have the right to slag off the councils. It's not like popping a few quid into your local Halifax."

John the Baptist of the River Ribble agreed: "Local councils have money spread all over the place and only using the highest rated banks as recommended by Alastair Darling's chums. Look to the top if you want to complain."

But Quirky responded: "I don't give a monkies about the intricacies of LCC banking, what I do care about is when it hits our pockets ...... as it will and has already been admitted by other councils."

David C said: "According to Question Time last night, the Government are making sure the people don't pay for this. Why should the good people pay more because councils didn't spend their money and lost it?"

Kilroy said: "Highly rated? Anybody with any knowledge of these things should have been aware of the question marks around these Icelandic banks. I'm more careful with my own money but of course, this isn't actually the council's own money so they can afford to be more reckless. Idiots!"

Outdoorboy said: "Wonder why you don't see on your council tax bill breakdown how much of our money they have invested. Is it because we would wonder why they need that inflation-busting increase in the bill when they have millions stashed away?"

River said: "I'd be happy to offer my services looking after Lancashire County Council's spare cash. I've got a very capacious mattress."
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