A LEADING Manchester museum could lose nearly £1m as the latest victim of the Icelandic banking crisis.

The Museum of Science and Industry (MOSI) had £900,000 savings invested in the failed Kaupthing, Singer and Friedlander bank.

The funds were earmarked for developing the museum's education programme and other 'potentially important' heritage projects, a spokesman said. Bosses have been working to negotiate the return of the cash since the bank went into administration last week.

The museum, which has charity status, sought to reassure its 800,000 annual visitors that current business would not be affected because the cash was not part of its core funds.

Director Steve Davies said: "The museum's finances are in good order but this money is an important part of our reserves which we hope to use to develop our popular education programme.

"Many primary school children in the north west visit the museum on one of their field trips as the museum's inspiring interpretation of history and science helps to bring the national curriculum to life.

"We'll be making every effort to secure our investment so we can continue with our educational plans, and look to our friends and natural partners to help us in this endeavour."

MOSI is the newest Greater Manchester victim of the Icelandic bank crash.

On Tuesday we revealed that the University of Manchester and Manchester Met have £15m invested in Heritable Bank, a UK subsidiary of the Icelandic Landsbanki.

Bosses of the Christie cancer hospital are fighting to save £7.5m - most of it charity donations - which they invested in Kaupthing, Singer and Friedlander in May and July this year.

They are now moving all their £40m savings from banks to an account at the Treasury.

And Bolton council has £6m - 10 per cent of their deposits with the Landsbanki Group. Cheshire county council invested £8.5m of their £200m with Heritable Bank.

Its investments total £200m. And Lancashire County Council confirmed it had invested £10m with Landsbanki, which included £1m from Lancashire Police Authority.

A total of 108 councils have deposited a combined total of almost £800 million in the stricken Icelandic institutions and the Icelandic government is refusing to honour its obligations to guarantee funds.

The money invested in Icelandic banks by individuals, local authorities and charities is thought to total £3bn. ends