Kent County Council finance chiefs are to travel to Iceland for a crucial meeting that could determine what the prospects are for it and other authorities to recover £920million locked into the country’s banks.

Kent, which has £50million at stake, is to head a delegation with colleagues from the London borough of Barnet for a formal creditors meeting.

The county council has one of the largest sums at risk but several other district councils also could lose out. Canterbury City Council has £6million invested while Tonbridge and Malling council, Sevenoaks council and Dover council have £1million each. Kent Police has £11million at stake.

The meeting is the first for creditors since the crisis broke and represents an opportunity for councils to gauge their chances of retrieving its money.

Administrators for the three Icelandic banks are expected to provide details of the scale of the banks’ liabilities in relation to their remaining assets - which may provide some help in indicating what investors may be able to recoup.

It will also be the first chance for councils to quiz the banks’ administrators, who will be asked to explain the reasons for their collapse and to set out their recent trading position.

A KCC spokesman stressed that Kent had been asked to represent the interests of all the UK local councils that were affected.

"It is good news that the meeting is happening and that we will be able to meet face to face with those representing the banks," she said.

"We are actively pursuing the recovery of the money and we expect to know a lot more about what will happen as a result."

KCC has £50million deposited in three banks. It has £15million with Glitnir and £17million with Landsbanki. It also has £18million with Heritable Bank, which is based in the UK and KCC is optimistic of getting most of that £18million back.

Meanwhile, one Kent council with £1million tied into the banks says it is not optimistic of a quick solution. Dover council said it did not expect to see its money back for some time but emphasised it had not given up on efforts to recover it.