BURNLEY Council has sold its stake in Icelandic bank Landsbanki at auction to free up money to go into services and resources.

The council could have hung onto its share for an indefinite amount of time to recoup the full amount, or chosen to take part in the auction.

Waiting to recover the full amount could have taken years, and executive member for finance Mark Townsend said he thought it was better to settle for most of the money, and have the cash available sooner. Just over 90 per cent of the value of the investment has been recovered.

A Burnley Council spokesman said: “Burnley Council has sold its claim against the insolvent estate of LBI (formerly Landsbanki Islands HF).

“The claim was sold through a competitive auction process. The price at which the claim was sold was based on a reserve price set by the council on the basis of legal advice from law firm Bevan Brittan and financial advice procured by the Local Government Association.

“The proceeds of the sale, over £390,000, were paid in cash in Pounds Sterling and those funds have already been received.

“The sale means the council has recovered 91.8 per cent of the amount that was originally deposited with LBI in 2008.

“The sale of our claim represents a clean break. Burnley Council is now no longer a creditor of LBI. The money has gone back into providing general services for the people of Burnley.”