The news broke late yesterday (Thursday), as it emerged that charities, police forces, and more than 108 local councils had assets in crisis-hit banks.

Although Sussex Police is the fifth worst affected force in the country, Sussex Police Authority says there will be no consequences for the county's day to day policing.

The £6.8m - which is about nine per cent of Sussex Police's funds - is invested with Heritable, Landsbanki's British banking-licensed subsidiary.

A statement from Authority representative Carrie Aldous said: "Landsbanki has been placed in receivership, which has had a knock-on effect on Heritable.

"Heritable has been put into administration and all of its accounts frozen.

"Unlike many local authorities, the Sussex Police Authority has no investments directly with Landsbanki, so all of its money is held within UK-licensed banks."

She added that the money is not yet due to be repaid to the Authority.
The total is held as three separate deposits, which are supposed to be paid back over the next three months.

If Heritage is included in the Government's support plan for the UK banking system, the money could still be repaid on time.

The statement concluded: "While the turmoil in the financial markets is a matter of very considerable concern, neither the delay in repayment of these deposits, or even their ultimate loss, will have any impact on operational policing in Sussex.

"Along with local authorities, we will continue to monitor the situation closely."

UK local authorities have more than £1bn invested with Icelandic banks which have now collapsed.

Although private investors have been told that the UK Government will reimburse them for any losses, no such assurance has been offered to local councils.