Cheshire County Council has revealed £8.5m is invested with troubled Icelandic bank Heritable.

The amount makes up about 4% of the council’s total £200m investment with national and international financial institutions. The council has a budget of £1bn.

Council spokesman Ian Callister said the council is liaising with the Local Government Association to discover whether the Government will give similar protection afforded to individual savers.

Wirral Borough Council in Merseyside said it had a £2m bond with Heritable Bank.

Merseyside Pension Fund, which is administered by the council and provides pensions for local government workers including council staff across Merseyside and staff at Liverpool John Moores University and St Helens College, has a £2.5m bond with Heritable Bank and a £5m bond with Glitnir Bank.

A spokeswoman for Wirral Council said: “We expect these bonds to be honoured.

“To put the figures into some context, Wirral Council made £4m through investment activity last year, which was placed into reserves to ensure that local services are not affected by changes in financial markets.

“Considering the exposure that other local authorities have had with Icelandic Banks, the impact on Wirral Council is minimal. However, we will continue to monitor the situation closely.”

In a statement released by Wirral Council,a spokesman for the pension fund said: “Merseyside Pension Fund has stringent risk controls in place which ensure that its investments are diverse, with limited exposure to any one asset class, market, sector or stock.”