A TOP accountancy firm has been appointed to investigate the events that led to £27.4 million of taxpayers money being frozen in collapsed Icelandic banks.

Deloitte was handed an £18,000 contract to conduct the independent review last night by a panel of councillors.

The firm will have a broad remit to find out how and why Barnet Council officers invested the money in two banks that collapsed along with the money markets.

It emerged in October last year that the money could be lost and treasury manager Patrick Towey later resigned amid revelations that he ignored approved credit rating criteria when making the deposits.

Councillor Alan Schneiderman, Labour spokesman for resources, said he hoped the investigation will be productive, but said he had "some concerns" over the time frame allowed.

Deloitte will submit a report to the council before the next full council meeting on July 14.

He said: "It would be helpful for it to be longer to get a more in-depth report."

He added: "I'm keen that it looks at the role of members as well as officers, because it's quite clear that officers can't be expected to take the whole blame.

"Members, in particular the cabinet member for resources, need to be looked at."

Council leader Mike Freer came under fire from opposition councillors for failing to take responsibility for the potential losses.

As cabinet member for resources at the time the investments were made, he was responsible for setting treasury management policy, but has since claimed he was misled by officers over whether or not it was being followed.

At a meeting of the full council in May, where the terms of the investigation were agreed by councillors, Mr Schneiderman attempted to have auditors look specifically at the role of Mr Freer.

However, the Tory councillors used their majority to vote against Mr Schneiderman amendment to the terms.

Mr Freer said yesterday that the investigation will not specifically examine his role in the investments.

He said: "It will look at the policy and whether or not controls were applied to it.

"The role of members is to check the policy and monitor the officers.

"They will look at whether the checks and balances were there and whether they need to be changed."