All six major councils in Oxfordshire are among at least 40 local authorities in the UK caught up in the Icelandic banking crisis, it was revealed today.

Deposits of Oxfordshire taxpayers' money totalling £28.5m are involved, but none is from local government pension funds.

The county council is now waiting to hear whether investments in three Iceland banks will be repaid.

The situation with the Icelandic banks remains unclear and has changed several times over the past 24 hours — the councils are pressing the Government for a clear statement on the position of these funds.

West Oxfordshire District Council has £9m in Icelandic deposits, Cherwell District Council has £6.5m, Oxfordshire County Council has £5m, Oxford City Council has £4.5m, South Oxfordshire District Council has £2.5m and the Vale of White Horse District Council has £1m.

Today, Charles Shouler, the county council's cabinet member for finance, said County Hall's element of the annual council tax bill would be unaffected by the crisis.

The county council has its money tied up with Landsbanki, which was taken into Icelandic government control on Tuesday.

He said: "The Local Government Association will no doubt be working hard on behalf of the many councils who would have had funds invested with the Icelandic banks.

"We start the year with a total budget of around £1bn.

"We do not spend all of that money in one go at the start of the financial year in April, so we need to keep it invested in banks ready to spend on our services later in the financial year. We also keep our reserves in such accounts.

"We obviously want this £5m back. It is only a small part of our overall budget — but £5m is a large sum of money in anybody's book.

"The council only ever invests in banks that have high credit ratings - the particular bank we invested in had precisely that."

"It's unlikely there would be any effect on services because we would have to absorb the loss by taking it from the reserves we carry precisely to cover such emergency situations. However, we would obviously strongly prefer not to have to do that."

Ed Turner, the deputy leader of Oxford City Council said: "The city council has carefully followed Government and Audit Commission guidelines covering management of its loan portfolio and is calling on the Government to underwrite any losses arising from the current international banking situation in order to protect local services and council tax levels in future years."