The University has revealed that it hopes to reclaim a “substantial” amount of the £11 million it invested in Icelandic bank accounts which were frozen in the financial crisis of autumn 2008.

The news comes after Cambridge City Council announced last week that it aims to have recovered more than £1 million of the £9 million it is owed by the end of this year.

Whilst a University spokesman, speaking Monday to the Cambridge News, could not confirm either how much money had been paid back to the University or how much was to be received, a spokesman told Varsity that “overall we are anticipating a substantial recovery in time.”

Three per cent of the University’s total investments were frozen in Icelandic banks last October. Heritable bank, a subsidiary of Landsbanki, was in possession of £8.5 million whilst Glitnir was holding £2.5 million.

The spokesman also stated, “there are no knock-on impacts on the University’s spending plans.” It is not known how the money would be spent or what it would contribute to.

By contrast, Cambridge City Council announced in October that it had already recovered £650,000 from Heritable and is expecting a further £400,000 by the end of 2009. The bank has also promised the return of £2.9 million of the £4 million owed. Whilst the Council is still owed a further £5 million by Landsbanki, repayments are expected to begin in 2010.

The leader of the Council, Ian Nimmo-Smith, said, “This is good news. It shows that confident, patient and persistent work pays off.”

In October, the Council raised car parking prices in Cambridge. Councillors insisted that the rise was “not to make up for the losses in investments in Icelandic banks”.

The Council was one of many taken by surprise last year when Iceland’s banks failed. The city’s investments had been made at a time “when both banks were assessed as having good credit ratings”.

The University told the Cambridge News in September 2008 that it had been working to reduce its investments in Iceland on the advice of financial advisers, in order to “diversify” any risk.

The University is not, however, in the worst position in the financial crisis. It was reported in October 2008 that Oxford University faced losses of up to £30 million in Icelandic banks, whilst the Higher Education Funding Council for England disclosed that the 12 English universities involved could lose £77 million in total following the crisis.