STROUD District Council is fighting to clawback £3million of taxpayers’ money deposited in a troubled Icelandic bank.

A claim has been made with the receivers of Glitnir Bank and a delegate has been sent to a meeting in London to help decide how councils will proceed with the Icelandic Government.

Speaking at a full council meeting at Ebley Mill on Thursday, chief executive David Hagg said: "It’s inappropriate to assume that this is a loss to the council.

"This council will take the necessary steps to get that £3 million back and there’s a process which is underway.

"We haven’t lost anything and we’re pursuing that in a financial and legal way to the best of our ability."

He said the crisis would not affect the financial running of the council and it was ‘business as usual’.

"I don’t want people speculating about services or jobs," he said.

He added it would be wrong to suggest that anything ‘untoward’ or ‘questionable’ led to the deposit earlier this year.

David Wride, cabinet member for finance and business support, said officers would review the authority’s list of approved deposit takers in January, as well as the maximum amount of money it can invest with a single institution.

"Lending to banks in much more complicated than I ever imagined because certain institutions, although they look like they’re not connected, really are," he said.

"And with all these take-overs that have gone on in the past, that has complicated the situation."

He said that officers would also investigate the possibility of investing in ethical banks, which aim to fund social or environmental projects transparently.

Cllr Wride stressed the crisis was global and dozens of councils had invested much more than Stroud.

The meeting also heard that both Houses of Parliament had declared Icelandic banks safe in spring.

But some members said the deposit was risky and demanded to know how the decision was made.

Cllr Tom Williams (Lab, Cainscross) called for a member of the council’s cabinet to resign.

"My criticism is with the policy which took the decision-making in-house and the political overseeing of the policy of determining the investments the council makes," he said.

"The crisis didn’t come out of the blue and the bank didn’t have the best credit rating.

"I think it’s unfair to expect the chief executive to defend this poor decision that has led us into the perilous state of risking £3million of taxpayers’ money.

"We can count ourselves rather lucky the crash didn’t happen when we had more money invested in the bank."

John Fowles (Lab, Cam West) also warned that councillors might have to assume the money is lost in the coming months as they set the budget.