Councils join forces for Iceland response

The Local Government Association's (LGA) seven-strong media relations team is co-ordinating the media response with councils, as well as groups such as fire and police authorities and the Chartered Institute of Public Finance and Accountancy.

Meanwhile, the LGA's five-strong public affairs team is briefing the British-Icelandic all-party parliamentary group and the Department for Communities and Local Government select committee.

LGA director of news Richard Stokoe said: 'I had 35 calls (from journalists) on Wednesday evening and 40 calls the following morning. A lot of it is myth-busting. It is just explaining what the situation is at this stage.

'For example, The Independent ran a story that tens of thousands of council workers would not get paid, and we do not know where that story came from. We want to make sure that we are at the front of it, so they see us as reliable.'

The LGA was due to meet Treasury ministers this week to thrash out emergency measures amid fears of council tax rises, missed wage payments and service cuts as a result of the Icelandic bank crisis.

At a local level all councils affected have operated media responses. Kent County Council has invested £50m in Iceland. Head of comms Jane Clarke said that the media response has been largely responsible and even praised local news for passing on the council's 'reassuring' message that council services would not be affected.

Meanwhile, Transport for London (TfL), which has invested £40m in Iceland, has handled all issues in-house, led by director of news Stuart Ross. TfL said: '£40m is a significant sum, but not in the context of our overall budget of £7bn.'