The Leyland-based local authority invested £5m in Iceland and has faced an anxious wait to discover how much of it it will get back.

A total of £3m was invested in a long-term loan with Iceland's Landsbanki, and £2m in short-term investments with its English arm Heritable.

It could take several years before the matter is finally resolved one way or the other, but Coun Stephen Robinson, cabinet member for finances and resources, said they were currently looking at losing as much as £920,000.

He said: "This is an ongoing situation and depends on legal matters as well.

"The administration have said throughout it will depend on the financial market."

At the end of July last year, the council received a first repayment of over £300,000 and in December, a further dividend of over £255,000 was made.

Predictions about how much money investors can expect to get back have varied between 55 per cent and 90 per cent.

Coun Robinson said any of the investment which could not be recovered would be written off from the council's reserve funds, not from the council's annual budget so there would be no impact on frontline services.

Council leader Margaret Smith said: "It is coming back in dribs and drabs and will continue to do so.

"Things are moving forward and there are assets out there which can be released. "

Coun Matthew Tomlinson, leader of South Ribble's Labour group, said they were concerned how any money lost would affect frontline services.

He said: "It could have been worse but it could have been a lot better.

"We've never blamed the council for having money in Iceland but £5m was nearly a quarter of all the money we had. It was about having all our eggs in one basket.

"What's important now is to try and see how this is going to affect the services we deliver to the people of South Ribble."