MILLIONS of pounds of council cash from the UK is in troubled Icelandic banks.

The money includes £1m from Kirklees Council, a staggering £9m from Wakefield and £6m from the West Yorkshire Police Authority.

Now they, and dozens of other councils and bodies across the country, are waiting anxiously to see if the money is safe.

Millions of pounds of taxpayers’ money is at risk after local authorities made deposits in Icelandic banks.

The councils insist they followed Government guidance and consulted independent financial advisers. But they are under close scrutiny.

Kirklees Council has £1m of its money invested in collapsed Icelandic bank Landbanki.

But councillors are confident they will get their money back in full, despite problems caused by the worldwide credit crunch.

Local authority leaders are seeking an urgent meeting with Chancellor Alistair Darling after it emerged at least 20 councils have cash in troubled Icelandic banks.

Their overall investment is hundreds of millions of pounds and they are asking the UK Government for the protection it has promised to personal savers.

The Treasury said it was looking into the issue of protection for councils but has, so far, given no guarantees over the money.

The LGA, which represents councils in England and Wales, says it has identified more than 20 councils which are believed to have deposits in the collapsed Icelandic bank Landbanki or its UK arm Heritable.

Clr Andrew Palfreeman, Kirklees Cabinet member for finance and governance, said: “The council has £1m investment in Landsbanki, which is due to be repaid in January 2009.

“The Icelandic Government has said that the bank will run as normal, so we expect the investment to be repaid and will be working to secure that.”

Shadow local government secretary Eric Pickles said: “Councils have been actively encouraged, and indeed praised, by Whitehall to undertake these kinds of investment.

“Local government finances are now at risk and people will be concerned about their local services and council tax bills. The Government needs to stop dithering and clear up this uncertainty.”

West Yorkshire Police Authority confirmed it had £6m invested in Icelandic banks.

A spokesman said: “We have taken care, in accordance with national guidelines, to spread the risk of any investments in accordance with the authority’s approved investment strategy which places security above return.”