Several local authorities have come forward to say they have millions of pounds in accounts with Landsbanki or its UK arm Heritage.

Scarborough Council’s Finance and Asset Management Service has confirmed the authority is unaffected by the current financial crisis in Iceland’s banking industry.

Martin Pedley, the council’s asset and risk manager, said: “Following national headlines that some local authorities in England and Wales have deposits in the Icelandic bank, Landsbanki, we would like to reassure our customers we are not one of the councils that has, and are therefore unaffected by this current crisis.

“While we cannot guarantee that we will not be affected in the future by financial problems that may arise with other banks, we do not expect these to be significant as our deposits are purposefully spread across a wide range of banks and financial institutions to minimise risk.”