But the £5 million investment, made by council experts seeking a good return on capital, resulted in red faces at the town hall when the venture turned out to be a financial flop.

Council officers reported last Thursday that taxpayers did not lose a penny, and quashed rumours that the financial debacle had cost Wokingham £1m.

Cllr Anthony Pollock, the executive member for economic development and finance, told a meeting of the Executive that Wokingham Borough Council had invested £5m in Iceland banks and that £4,779,000 had been clawed back.

As the remaining part of the debt had been 'sold off’ it meant that all the outstanding money had now been returned.

Cllr Pollock said: “At the time, lots of individuals and institutions were doing the same thing and private investors lost a fortune.

“We are very grateful to our lawyers, who beavered away very successfully on our behalf and got the money back.

“Hindsight is a wonderful thing and we would not do it again. We also got money back from Ireland when the investment matured.

“Lots of people were investing in Iceland at the time because we were promised a good return. We did not think it was too risky.

“Nobody knows what we have lost in interest over six years but it will not be a fortune.” He added: “We had a different attitude to risks then and were trying to do our best on behalf of the taxpayers.” Investments in Iceland went into meltdown in 2008 when the three major commercial Icelandic banks crashed after difficulties in refinancing short-term debt.