LONDON - The government will investigate ways to help charities who have lost money through their investments in Icelandic banks, Chancellor Alistair Darling said on Sunday.
However, he warned that he needed to strike a balance between helping those who had suffered losses and asking the taxpayer to bail out savers who made personal decisions to invest in foreign banks.
Darling was responding to a Treasury select committee report on Saturday that said charities should be get a one-off compensation package, but ordinary savers and local authorities should not.
"We will continue to see what we can do to help charities... the problem we have in all these things is that inevitably, if you are putting money into savings you have got to take judgements and I have got to balance what is right to ask the taxpayer in general to do... and obviously with charities, there's a lot of sensitivities there," Darling told the BBC.
Data collated by various charity groups at the government's request showed that 48 charities have lost a combined total of 86.6 million pounds in Icelandic banks, but an accurate figure was harder to obtain as some charities would not reveal their losses.
Estimates by the independent watchdog, the Audit Commission, place charities' total exposure at around 120 million pounds.
The Charities Aid Foundation called on Darling to "act swiftly and compensate those who have lost funds."
In its report, the Treasury committee said it would "seem perverse" to reward local authorities who had made bad investment choices with a taxpayer-funded rescue.
Last month the government revealed that 125 councils in England were exposed to the tune of 923.2 million pounds in Icelandic banks by the end of last year.
It was forced to change accounting regulations to enable authorities to postpone any possible impact on their budgets until 2010-11 and stop them slashing services and raising taxes.
The committee also said the government could not be expected to "provide cover for deposits held by British citizens in jurisdictions outside the direct control of the UK."
The Icelandic government was forced last October to take control of Kaupthing, Landsbanki and Glitnir when they collapsed as the financial crisis started to spread.
Darling froze the assets of Landisbanki's UK arm, through which many Britons had savings in its internet bank Icesave, in order to protect their deposits.
But that guarantee does not extend to those in offshore subsidiaries, such as Landsbanki Guernsey and Kaupthing Singer & Friedlander, Isle of Man.
