Councils like Kent County Council who have invested heavily in Icelandic banks have come under fire from a taxpayers’ campaign group.

Mark Wallace of the TaxPayers' Alliance, said it was "an absolute disgrace" that town halls had left themselves exposed to potential losses totalling millions of pounds.

Kent County Council has £50million invested in Icelandic banks but has insisted that no services will be cut and council tax bills will not have to rise to compensate for any losses.

Meanwhile, Canterbury City Council has revealed it has £6million deposited in two collapsed Icelandic banks.

Chief executive Colin Carmichael said the money was invested after government guidance as part of the council's treasury management strategy and denied any "reckless" behaviour.

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In a statement, Dover District Council said it had £1million invested in Landsbanki, which equates to four per cent of its total investments. A spokesman said the council is "working to ensure it will not have any immediate impact on services" but did admit the money is "at risk".

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Tonbridge and Malling District Council has also confirmed a £1million investment in Icelandic institutions but it too says there will be no impact on services.

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Sevenoaks District Council also has £1million deposited with Landsbanki - which is part of a £29.5million investment portfolio it has with a range of banks and building societies.

A statement from the council said all its investments were "in accordance with good practice and government guidance" - however, the statement added the council was "very concerned" about Landsbanki's position.

Mr Wallace said: "People will be shocked that the councils had this money stashed away in the first place. Every year we hear that councils don’t have enough money and need to raise taxes but it seems they have had sufficient excess tax to salt tens of millions of pounds away."

He added: "It’s an absolute disgrace. If the councils can’t get their money back, the people who took these excesses should seriously consider their positions as councillors."

Kent County Council is among authorities seeking urgent talks with the Chancellor after it emerged that it has £50million deposited in troubled Icelandic banks. The £50million includes £15 million with Glitnir Bank, £17 million with Landsbanki and just over £18 million in its British subsidiary, Heritable.

While the Government has offered to protect individual savers and investors with cash invested in Icelandic institutions, no such guarantee has been made to councils.

County Hall finance chiefs sought to play down the crisis and insisted there is no risk of services. But they admit they do not yet know what the scale of the risk is.

Cllr Nick Chard, KCC’s cabinet member for finance, denied that the authority had acted irresponsibly and pledged that no services would be cut.

"I do not know what the risk is but I believe it is minimal. The council does not have a liquidity problem. We will fight to get every single penny back. We work under very clear guidelines and get professional advice and up until last week, these banks were rated very highly."

He added: "We’ve spread the risk as much as possible and have £470million on deposit at present. In Kent, there will be no impact on council services."

• Ashford Borough Council, Dartford Borough Council, Gravesham Borough Council, Maidstone Borough Council, Medway Council, Shepway District Council, Swale Borough Council, Thanet District Council and Tunbridge Wells Borough Council are all unaffected.