The first £100m of money recovered from the collapsed Icelandic bank, Landsbanki, has been paid into council accounts this week, the Local Government Association (LGA) has confirmed.

The payments follow a successful legal action – led by the LGA – which secured coveted ‘priority creditor' status for UK local authorities following the collapse of two major Icelandic banks, Landsbanki and Glitnir, in 2008.