Aberdeen City Council is monitoring very closely the steps which the Icelandic government and the UK government are taking in relation to Landsbanki.

The city council has no money invested in any Icelandic bank but there is Landsbanki involvement in the £120m 3Rs project to rebuild and refurbish several of its schools.

Landsbanki is lending money to NYOP - the city council's private sector partner for the 3Rs project. NYOP has signed a contract with the council to design, build, finance and operate nine new schools and refurbish one other.

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The city council does not begin to pay for the schools until they are operational. The building phase is under way and is scheduled for completion by September 2010. The project is currently ahead of schedule.

Aberdeen City Council resources management convener Councillor Kevin Stewart said: "The Landsbanki situation is an unfortunate example of how the current global banking crisis can affect us all. We see in the news what governments around the world are doing to bring stability back to the financial sector - but at a local level the council is doing everything it can to minimise the impact."

(GK/JM)