Council chief executive Helen Briggs said:"At this time in point we don't foresee an impact on council tax or jobs. In practical terms £1million is not lost yet. We are confident of getting it back, but we are in the hands of others."

"The council invested the money with Heritage Bank in July for just six months at a time when the bank received a high credit rating and following financial guidelines to the letter. They invest with about 19 banks or building societies."

Deputy council leader Terry King (Con) said: "We use external professional advisors, we take professional advice and the Government suggested spreading the money around.

"Investing the money in this way is common practice across the county. This does not mean that councils are sitting on huge cash reserves, it's simply a way of earning interest on any money that is available."

Updated, Thursday 3pm: RUTLAND County Council has £1m of public money invested in a collapsed bank in Iceland.
The authority is one of 20 councils in England which invested money in the failed Landsbanki or its UK branch Heritable.
Rutland says there is no risk to services in the county. It is waiting to learn more about Dutch bank ING Direct's takeover of Heritable.
The Local Government Association believes English councils have about £230m deposited with three Icelandic banks and councillors are seeking a meeting with Chancellor Alistair Darling. The Government has guaranteed the savings of individuals and the association says it should do the same for councils.
A Rutland County Council statement said: "We are one of about 20 councils across the country with money invested in the Icelandic banks at the centre of recent speculation but would like to reassure residents that there is no expected risk to the delivery of council services.
"Any investments, in this case £1m with Heritable bank, made by the council are carried out in accordance with the council's treasury management policy which is prepared with
independent professional advice and approved by the council's external auditors.
"As most people will be aware, accounts in these banks have been frozen.
"However, we are encouraged that ING Direct has taken over Heritable and we await further developments on what this means."
North Lincolnshire and North East Lincolnshire borough councils also had money invested in Landsbanki and Heritable.
South Kesteven District Council, Lincolnshire County Council and Northamptonshire County Council have confirmed they do not have money invested in the celandic banks.
Action is being taken to safeguard £3 million of Peterborough council taxpayers' money which has been deposited in two failed Icelandic banks.
Peterborough City Council chiefs have revealed that £3 million had been deposited with the UK subsidiaries of two Iceland-based banks.

Some £2 million has been invested with Kaupthing Singer and Friedlander, which is the UK subsidiary of Kaupthing Bank and which has been placed into administration.

And a further £1 million has been deposited with Heritable Bank, a subsidiary of the collapsed Landsbanki.

The city council is one of about 100 local authorities across the UK that have been left exposed by the banking failure in Iceland, with total investments at risk thought to be more than £720 million.