KIRKLEES taxpayers are still owed £200,000 two years after an Icelandic bank collapsed.

Kirklees Council had £1m deposited with Landsbanki when it went bust in October 2008.

The council recovered £800,000 by this January.

But a Kirklees spokesman said yesterday that the council had not yet received the remaining £200,000.

He said: “We are continuing to liaise with the Local Government Association, who are co-ordinating this work on behalf of councils, and we hope to recover the full amount.”

Clr Kath Pinnock, who leads the Lib Dems on Kirklees, believes the council should go on fighting for the cash.

The Cleckheaton councillor said: “The council and the Local Government Association must pursue this to the bitter end because we want us money back.

“Why should Kirklees suffer as a result of casino banking?

“This money should not be written off, even if it takes some years to get it back.

“I hope the same kind of pressure will be put on Royal Bank of Scotland and others who played with our money and lost it.”

Meanwhile, Calderdale Council has decided to bank British to try to avoid such problems in the future. The council is believed to have had money deposited with Landsbanki, but moved it before the bank crashed.

A Calderdale spokesman said: “The council’s Cabinet decided on a new strategy earlier this year. From now on we will only invest in banks or building societies domiciled in Britain.”

More than £1bn of taxpayers’ money held by 100 councils was in danger after Landsbanki and another Icelandic bank, Giltnir, collapsed in October 2008.

Kent County Council had £50m invested in the banks, while Nottingham City Council had £41.6m at risk.