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Councils look set to find out next week how much money will be returned to them from Iceland's banks. LGA sources close to the negotiations with administrators told The MJ: ‘We should have movement within the next few days towards knowing how much we are going to get back.' LGA leader Margaret Eaton is then expected to renew pressure on the Government to step up financial support for the hardest-hit councils. Local government minister John Healey is understood to be holding a meeting today to discuss developments with officials. Ordinary savers who had placed money with Icesave were told by the Treasury last week they will get their money back through the Financial Services Compensation Scheme. But a deal for local government has partly been held up until Iceland agreed a bailout deal with the International Monetary Fund. It has now approved a $2.1bn loan to help stabilise the banking system, of which $833m can be accessed straightaway. This should pave the way for a bigger support package of $6bn from four Nordic central banks plus possible loans from the Bank of Japan and European Central Bank. News came as finance chiefs from Kent CC, which had £50m invested, and Barnet LBC will lead a delegation to Iceland. A Kent spokesman said: ‘KCC is determined to fight to get every penny back. ‘This meeting will help KCC better understand the situation in Iceland and determine how we can start recovering the money deposited there.'

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WHITEHALL

Councils wait for Icelandic 'thaw'

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