Charities beg for Icelandic savings to be protected

Charities pleaded with City minister Paul Myners for special help after the National Council for Voluntary Organisations revealed they had at least £120 million invested in the banks Landsbanki, Kaupthing and Glitnir.

Among the biggest sums at risk is £11.2 million from the National Cat Protection League. The Samaritans confirmed it had £1.5 million with Kaupthing Singer and Friedlander, a UK subsidiary of Kaupthing which runs the charity's investment portfolio.

The National Housing Federation also confirmed to the Evening Standard today that it was "highly likely" that some of England's 2,000 housing associations had savings with Icelandic banks.

Housing associations are not-for-profit organisations that receive £1.6 billion a year from the Government to provide rented homes for those on low incomes. It emerged yesterday that about £1 billion in council savings is at risk.

The full extent of the impact the Icelandic bank collapse will have on Britain emerged as a team of six officials from the Treasury, FSA and Bank of England flew to Reykjavik for a weekend of urgent talks.

The crisis sparked fury between London and Reykjavik, with Prime Minister Gordon Brown denouncing the "totally unacceptable" failure of the Icelandic authorities to guarantee the money of UK depositors.

Icelandic Prime Minister Geir Haarde in turn blamed Britain for the collapse of his country's third largest bank, Kaupthing, after the Government used anti-terrorism laws to freeze Icelandic assets in the UK.

Mr Brown's spokesman said they hoped now to work "constructively and co-operatively" with the Icelandic authorities. However, he strongly defended the Government's action in freezing the Icelandic assets.

"We had found it very difficult to get information from [Iceland] whose authorities had indicated they would give preferential treatment to domestic creditors over overseas creditors."

Boss of the NCVO, Stuart Etherington, called for urgent help from the Government.

In a statement, the Samaritans said: "We are aware that Kaupthing Singer & Friedlander Limited (KS&F) has been put into administration.

"Samaritans has no deposits with this company or with any Icelandic bank. A subsidiary company of KS&F, Singer & Friedlander Investment Management Limited (S&FIM), manages Samaritans' investment portfolio but, as required by the FSA, these investments are held separately from the assets of S&FIM and should not be affected by the financial position of either KS&F or S&FIM.

"S&FIM is not in administration and is currently carrying on business as usual. We are continuing to monitor the situation very closely."

A spokeswoman for the National Cat Protection League — now known just as Cats Protection — said: "We believe there is a case to be made to the Treasury that its particular deposits are public money that has been donated for us to help cats."

The Charities Aid Foundation called for the Government to give full protection for the charities' money.

Chief executive John Low said: "The Government has ignored the letter we sent in August calling for full protection for all charity deposits. Now it seems charities might lose millions in collapsed Icelandic banks. The impact of this on the people and causes dependent upon them could be catastrophic."

The Treasury has announced that all individual UK savers affected by the Icelandic bank crisis will be protected and it agreed late last night to extend the 100 per cent guarantee to small businesses.