The Merseyside Pension Fund, which is administered by Wirral Council and provides pensions for local government workers including council staff across Merseyside and staff at Liverpool John Moores University and St Helens College, has a £2.5m bond with Heritable Bank and a £5m bond with Glitnir Bank.

A spokeswoman for Wirral Council said: ''We expect these bonds to be honoured.

''To put the figures into some context, Wirral Council made £4m through investment activity last year, which was placed into reserves to ensure that local services are not affected by changes in financial markets.

''Considering the exposure that other local authorities have had with Icelandic Banks, the impact on Wirral Council is minimal. However, we will continue to monitor the situation closely.''

In a statement released by Wirral Council, a spokesman for the pension fund said: ''Merseyside Pension Fund has stringent risk controls in place which ensure that its investments are diverse, with limited exposure to any one asset class, market, sector or stock.''

No one from St Helens College was available to comment.

Almost 100 local authorities are believed to have invested in Icelandic banks.

St Helens Council will not be affected by the collapse of several Icelandic bank, town hall chiefs have insists.

Many local authorities have pumped millions of pounds of taxpayers money into the Scandinavian country's banking, lured by their high interest rates and strong credit scores.

However, a council spokeswoman said St Helens had no financial deposits in any of the troubled banks.

One authority alone - Kent County Council - has £50 million deposited in troubled Landsbanki and its UK subsidiary Heritable, as well as Glitnir Bank, while more than 20 others are thought to have exposure running into millions of pounds.

Transport for London said it has a £40m deposit with Kaupthing Singer & Friedlander, which has been placed into administration.