COUNTY council bosses are set to make changes to their investment policy following the Icelandic bank cash crisis.

Last month it was revealed Lancashire County Council had £10million tied up in the Landsbanki bank, which had been taken over by the Icelandic government.

It is not yet known whether the cash, which included staff pension funds and cash belonging to the police and fire authorities, will be returned.

Bosses are still hopeful, but last week County Hall was told by Landsbanki it could not estimate “with any certainty” which money would be returned to creditors and no timetable was in place for repayments.

Tomorrow the cabinet will be presented with a report from executive director for resources Adrian Cutts.

It recommends investing in banks that have been “nationalised” by the UK government, including Northern Rock and Bradford and Bingley, which had previously been excluded from the council’s investment portfolio.

Councillors will also be asked to agree a limit of £50million on investments in countries which do not have the top AAA credit rating, and increase to £70million the amount that can be invested in top UK banks.

Mr Cutts said there was no need to “materially” change the investment policy, because he said it was low risk.