by political editor Paul Francis

Kent County Council could finally be on course to recoup millions of pounds of taxpayers’ cash invested in Icelandic banks.

A court has ruled that KCC, along with other local authorities, can be regarded as preferential creditors when it comes to the distribution of the banks’ remaining assets.

The county council was one of the largest local authorities with £50m deposited in three banks.

The court’s decision is welcome news as it could pave the way for £32m that has been in limbo for close to two years being refunded.

The money has been tied up since the collapse of the banks. KCC has already secured more than £9m it had deposited with Heritable but has yet to receive anything from two other banks - Glitnir and Landsbanki.

Cllr Susan Carey (Con), deputy cabinet member for finance, said: "This is good news and upholds our position as preferential creditors, as we were confident we would do."

The ruling is also good news for other Kent authorities. Canterbury City Council has had £2m invested with Glitnir, while Tonbridge and Malling and Dover and Sevenoaks all with £1m.

Kent Police Authority also had about £10m on deposit but has received just £516,000 of that back.

Despite the Icelandic court’s ruling in favour of councils, it is thought the judgement could be appealed by the creditors involved.