Icelandic bank Glitnir to repay UK councils When the Icelandic banks were nationalised in 2008, they held nearly £1bn on deposit for UK councils. Although some of the cash has been returned, this is the first time Glitnir has paid up. On Friday it is expected to take the first step towards paying 53 councils and public bodies €290m. The councils to be paid are understood to include Kent County Council, which had £15m on deposit with Glitnir when it collapsed, and Cherwell District Council, which had £6.5m. Councils from Nottingham, Dorset and Norfolk have also been linked to the Icelandic bank. However, the other two banks, Landsbanki and Kaupthing, have also made repayments recently. The sum to be distributed by Glitnir represents 21pc of the total deposited in Iceland by councils. The payout only came after courts in Iceland awarded the councils "preferred creditor" status, ranking them higher than bondholders in the pecking order for repayment. The decision led to legal challenges from bondholders arguing the councils were little more than professional investors. For some councils the repayments will bring to an end an embarrassing chapter in which they were found to have been holding millions of pounds on deposit despite cutting services. Some councils were also blamed for putting too much faith in credit rating agencies when deciding where to place cash. Glitnir said the repayments to escrow accounts would be followed by monthly payments to creditors.