The thing I find really anoying about this is that the BBC did a report in March warning about the fact that the Icelandic banks had loans out that exceeded Iceland's GDP by quite a few times over, this was then raised in the house of lords in July, yet here we are, in October, and the effected councils are going to start bleating about wanting government protection, then they should be prosecuted for financial mismanagement! The funds may have been given a AAA credit rating, but surely common sense says that if a countries banking system has loans out that exceed that country's GDP, then that can't be a good thing.
The even more annoying thing about it is that it's the taxpayer who will windup paying for all this, one way or another. There isn't any accountability for the people who made these dire decisions in the first place.