Town halls across Lancashire are finally set to recover most of the money they invested in the doomed Icelandic banking system – after a three-year legal battle.
Chorley Council and South Ribble Borough Council are among the local authorities with millions of pounds at stake.
Now the Supreme Court in Icelandic capital Reykjavik has ruled that UK local authorities have priority status for deposit repayments.
In total, 145 local authorities invested in Glitnir, Kaupthing, Landsbanki and its London-based subsidiary Heritable Bank before the 2008 crash led to the group defaulting on more than £50bn of debt.
Lancashire County Council invested £10m in Landsbanki, South Ribble pumped in £5m and Chorley Council handed over £2m.
The banks were nationalised and their assets placed in administration following the collapse.
Authorities are now waiting for final confirmation that the ruling will be applied to all local authorities as opposed to just test cases.
But if that goes through, authorities are set to recover upwards of 80 and 90 per cent of their initial investment.
A spokesman for Lancashire County Council said: “We await confirmation from the winding up boards of both banks that they will apply the Supreme Court decision to the non-test cases and/or their intended next steps.”
Coun Peter Goldsworthy, (pictured) leader of Chorley Council, said they are expecting to receive 98 per cent of their £2m investment.
He said: “I’m delighted with the announcement that local authorities will be prioritised and be the first to be paid back by the Icelandic banks. “This is a major victory for Chorley Council and Chorley Council taxpayers.
“We’re now expecting a substantial amount of money to be returned and are awaiting details of how and when we will receive it.
“This is excellent news and corrects misinformation put out by Labour at the last election saying that we had lost the money.”
The Icelandic government said the legal decision had drawn a line under the affair and would be a crucial stepping stone towards further recovery.
Iceland will also repay the British and Dutch governments almost £2bn on money spent compensating personal deposits.