COTSWOLD District Council is set to recover £2million they had on deposit with a failed Icelandic bank after a ruling by Iceland’s Supreme Court.

At a hearing last week, the court ruled that UK depositors should recover the money they had on deposit with the Glitnir bank when it failed over three years ago.

This judgment means that UK Local Authority claims have been recognised as deposits with priority status over other creditors' claims.

The Glitnir winding-up board had appealed a decision by an Icelandic District Court which had earlier ruled in favour of UK depositors.

CDC will be among the first to be paid when it comes to getting their money back.

Councillor Lynden Stowe, leader of CDC, welcomes the news.

He said: “It’s very good news. It will help keep council tax down and help us to protect front line services.

“Many local authorities had funds with Icelandic banks. It’s good that we are now expecting to get more money back together with a lot of other local authorities, organisations and charities.

“We have all been working together using one firm of lawyers to make sure the costs of the legal action are kept to a bare minimum.”

Coun Stowe added the total cost of the legal case was “well below one per cent of the money outstanding.”

Gloucestershire County Council also hopes to benefit from the court ruling.

Jo Walker, Strategic Finance Director, said: “We are delighted with this judgement, it was an important test case and we’re hopeful that the precedent will apply to Gloucestershire County Council’s money.

“This will mean the council will be able to recover approximately £10 million, which will be used to pay off some of the council’s debt.”