by political editor Paul Francis

pfrancis@thekmgroup.co.uk

Kent County Council could find out within weeks whether it will finally recover millions of pounds invested in Icelandic banks after legal wrangling lasting three years.

Hearings at the Supreme Court in Iceland have been held this week – with another set for next week – to determine whether councils like KCC should be entitled to be regarded as priority creditors.

A judgement is expected to be handed down in about four weeks.

The council was one of the largest local authority investors in the UK when the banks collapsed three years ago.

At the time, KCC had £50m invested. It has since recovered around £11m from one of three banks – the UK-registered Heritable bank – but £32m on deposit with two others, Landsbanki and Glitnir, remains in limbo.

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The court’s rulings are crucial because they represent the final stage of a protracted legal process, after which neither side has any right of appeal.

Councils have been arguing they are preferential creditors and therefore a priority when the banks' administrators come to distribute the remaining assets.

That has been challenged by other investors who are contesting an earlier ruling in favour of councils.

KCC says it is confident in its case, which is part of a group action being brought on behalf of all authorities with deposits in Iceland.

The court ruling will be important for other councils in Kent as well as the Kent Police Authority.

Canterbury City Council has had £2m invested with Glitnir, while Tonbridge and Malling and Dover and Sevenoaks all had £1m.

Kent Police Authority also had about £10m on deposit but has received just £516,000 of that back.