Most local authorities which had cash deposits lodged with the four failed Icelandic banks have recovered the lion's share of their money, the Local Government Association (LGA) has declared.

Councils look set to recoup more than £1bn of the £1.05bn they had invested in the four Icelandic banks – Landsbanki, Glitnir, Heritable and Kaupthing Singer and Friedlander – at the time of their collapse in 2008.