The Local Government Association and the Government said today that it has established a ‘positive joint working’ relationship to ensure councils hit by the Icelandic banking crisis would be assisted.

Thirteen councils have responded to a survey by the LGA and said they may face short term financing difficulties, totalling £858m, through exposure to the Icelandic banks. However, none have said it will impact wage payments or services.

Financial experts are working with three of these councils from today and will report interim findings shortly.

In another 10 councils, specialists are establishing contact, fact finding and offering support and will report back to the Government and the LGA.

The Government and the LGA said they will continue to work with the administrators and the Icelandic Authorities to get the best and most rapid resolution of the situation relating.