It's war

Gordon Brown last night branded Iceland's failure to guarantee British savings in its failed banks as "totally unacceptable and illegal", amid warnings that more than 100 local councils, police authorities and fire services have up to £1bn lost in its bankrupted system.Charities, including children's hospices, warned they were at risk of losing £25m. In unusually aggressive terms, the prime minister said he was willing to use anti-terrorism legislation to freeze the assets of other Icelandic companies operating in Britain in an effort to recoup the lost money. The extent of the potential difficulties for councils and other bodies began to emerge yesterday as more and more said they had invested money in Iceland's high-yielding savers' accounts. By yesterday evening, the Local Government Association (LGA) had accumulated reports showing that 108 councils in England, Scotland and Wales had deposited £798.95m in Icelandic banks.egTransport for London £40mNottingham city council £42mMetropolitan police £30mThe government wants councils to deal with the consequences, although there are signs that it is ready to offer essential help. Private savers took risks too, yet ministers have protected them. A situation where bankers get billions, but keep their jobs, while councils take the hit, cannot be justified.

From the Guardian 9 October 2008