Yesterday we reported how few remained untouched by the financial chaos that continues to unravel across the world.

How true we were.

Today, every taxpayer in Oxfordshire is directly affected by the banking crisis because all six councils have a combined £28.5m tied up in a number of Icelandic banks.

And to make matters worse, Thames Valley Police had £5m invested in Landsbanki.

What this means for the man in the street, no-one is certain. But a host of council services could be affected.

A stark assessment was delivered by Ed Turner, deputy leader of Oxford City Council, who warned that this crisis could mean council tax increases or cuts to services.

Faced with that option, council bosses are more likely to choose service cuts — especially when the Government caps council tax rises above five per cent. The irony is that taxpayers will effectively have to bail themselves out — and that will not be lost on many people.

The banking institutions of Iceland were seen as solid and safe options for investments, but the past 24 hours have shown that almost nothing is immune from the financial meltdown. If this crisis had not come to such an abrupt head, some of us would never have known where councils invest money on our behalf.

There has been criticism in the past of places where our money has been deposited. We can expect more in the weeks ahead.

Oxfordshire County Council was quick to point out that it would try to avoid increasing its share of the annual council tax bill, but was quiet on the subject of service cuts.

But now is not the time for political posturing or playing games, especially when council taxpayers' hard-earned money is at stake.