by political editor Paul Francis

Kent County Council says it is confident that it is line to get back at least 90 per cent of the £50million it has deposited in Icelandic banks.

The council has been told by professional auditors who advise local authorities to expect the bulk of its money back.

KCC had one of the largest sums deposited in Iceland. Its deposits included £15 million in Glitnir, £17million in Landsbanki and £18million in the Heritable Bank.

Now the Chartered Institute of Public Finance and Accountancy (Cipfa) has told local councils to base their annual accounts on the assumption that most of the money will be returned.

In the case of the Heritable bank, KCC had already said it expected to get 80 per cent of the money.

Now Cipfa has told the authority that it can assume that it will get between 90 per cent and 100 per cent of the money deposited with Landsbanki and all its money back from Glitnir.

Cllr Nick Chard, KCC cabinet member for finance, said: “At the outset, people said we would lose all of this money; then people said we might get only five per cent and now we have learned that we will get 90 per cent back.

"It is very good news for the people of Kent. We are absolutely delighted.”

KCC finance director Lynda McMullan said: “We have long been confident that we would get most of our deposits back.

"This has now been confirmed. However we will continue to fight to get every last penny back and last week our head of financial services visited Iceland again to make the case for KCC and for other local authorities with money deposited in Iceland.”

In the case of Glitnir, Cipfa says that money will be paid back within six to eight months. In the case of Landsbanki, payments are likely to be staged between now and 2012.