Charities fighting to retrieve funds lost in the Icelandic banking collapse met with Kevin Brennan, minister for the third sector yesterday to push their case for compensation.

Representatives from Cats Protection and Naomi House Children’s Hospice, who have formed an action group named Save Our Savings (SOS), spoke on behalf of around 25 charities fighting for the return of around £50m collectively.

The group stressed the financial difficulties each charity was facing, and also complained that charities did not qualify for compensation under the Financial Services Compensation Scheme (FSCS).

Treasury ‘can’t set a precedent’

But a Treasury official at the meeting said the Treasury needed to avoid setting a precedent.

“The FCSC is only limited to retail,” she told the charities. “If we opened it up to charities, we would have to open it up to local authorities. Then everybody.”

After listening to both charities, Brennan promised to speak with Treasury ministers and get back to them as quickly as possible.

‘Very good meeting’

Ray Kipling (pictured), chief executive of Naomi House Children’s Hospice, said he was happy with the response:

“It was a very good meeting,” Kipling said. “Brennan was keen to listen to us and understood our position.”

The Save Our Savings action group, which has a seat on the Kaupthing Singer & Friedlander creditors committee, will continue to press its case politically.

It has a meeting next month with Stuart Etherington, chief executive of NCVO and Campbell Robb, director of the Office of the Third Sector.