Give us our money back screams the Telegraph

Gordon Brown has issued a public threat to Iceland, demanding the return of up to £20billion belonging to British savers, companies and local councils.The Prime Minister said Britain would seize the assets of Icelandic companies and take “further action against the authorities” over the collapse of the island’s banks.

A theme on the front of many of the papers

Lost in Iceland says the Guardian

By yesterday evening, the Local Government Association (LGA) had accumulated reports showing that 108 councils in England, Scotland and Wales had deposited £798.95m in Icelandic banks.
With no sign of Iceland being able to repay the money and councils lobbying ministers for reassurance that the cash would be recovered, Britain went on the offensive. "What happened in Iceland is completely unacceptable," said Brown. "I've spoken to the Icelandic prime minister, I have told him this is effectively an illegal action that they have taken. We are freezing the assets of Icelandic companies in the UK where we can. We will take further action against the Icelandic authorities where necessary to recover the money.

Councils trapped in £1bn black hole reports the Independent

One by one, 127 public bodies owned up yesterday to having multimillion-pound sums frozen with Icelandic financial institutions that have gone bust. Gordon Brown, threatened to retaliate against Iceland's "unacceptable behaviour" by taking legal action to seize its assets in the UK.

The Mail calls it a cold war reporting that the PM

launched a furious attack on the 'illegal' refusal to pay back billions owed to British investors in the country's failed banks.
The Prime Minister invoked rarely-used anti-terrorism powers to freeze Icelandic assets here as fears grew that vast sums of British cash could be lost.

The Times says that

Alistair Darling refused last night to bow to demands by town halls, police authorities and charities to protect £1 billion of taxpayers’ money held in collapsed Icelandic banks.
After an emergency meeting between ministers and council chiefs the Chancellor agreed to give “appropriate” help in the severest cases. But he rejected their call to extend the guarantee from individual savers to public and commercial bodies who also risk losing their cash.

Away from the Financial turmoil,the Sun reports that

THE heartbroken father of tragic Rhys Jones watched his son’s fatal shooting for the first time yesterday — on a video shown to a court.
But the prospect of the CCTV footage proved too much for 11-year-old Rhys’s mum, who fled in tears before it was played.
Stephen and Melanie Jones were in court as prosecutors outlined the case against a teenager accused of shooting dead Rhys in a pub car park, sparking public outrage.

The Mail reports that

The mother of murdered schoolboy Rhys Jones broke down and sobbed as the final moments of her son's life were played to a hushed courtroom yesterday.
Melanie Jones, 43, fled the hearing in tears moments before the jury was shown haunting CCTV footage of the precise moment 11-year-old Rhys was shot.
It showed her 'innocent victim' son falling backwards and collapsing after being caught in the 'mindless and indiscriminate' crossfire of gangs waging war on suburban streets close to his home.

Another court case began yesterday,the Guardian reporting that

Two doctors who launched car bomb attacks on London and Glasgow were planning a terrorist campaign designed to bring "indiscriminate and wholesale" murder to the UK, a court heard yesterday.
Bilal Abdulla, 29, and Mohammed Asha, 27, are accused of plotting to detonate two cars packed with nails and explosives near a busy nightclub in central London in June last year and, a day later, launching a suicide attack at Glasgow airport.

The Telegraph adds that

Jonathan Laidlaw QC, prosecuting, said: "In addition to the killing of the innocent the objective was to seize public attention, both here and internationally. By the carrying out of a series of explosions, with no warning as to where the next strike would occur, the terrorists knew the public would be gripped by fear."

According to the Times

Britain’s biggest trade union could be heading for a dramatic break-up, destroying what was hailed as a big step forward for the labour movement.
The Times has learnt that the T&G section of Unite has sought legal advice about pulling out of its troubled merger with the Amicus union, amid tensions between its joint leaders

Most schools break policy on admissions reports the Independent

the chief schools admissions adjudicator, Philip Hunter, has warned.
Schools are asking discriminatory questions about parents' marital and employment status although that is a clear breach of the law, Dr Hunter will warn the Government in his national inquiry into how places are allocated. Critics have claimed popular schools have used the results to turn away children from poorer homes.

The Telegraph reveals that

A computer hard drive with the private details of 100,000 members of the Armed Forces is missing, the Ministry of Defence has said.The portable drive contains the names, addresses, passport numbers, dates of birth and driving licence details of Army, Royal Navy and RAF personnel of all ranks, as well as their next-of-kin details.
It also has data on 600,000 potential services applicants and the names of their referees

who is the real Sarah Palin? asks the Guardian

A report on the Troopergate affair to be published today is expected to throw light on to a politician known as a moral crusader but whose values are questioned from right and left

The Independent meanwhile reports that

Rallies for John McCain and Sarah Palin are becoming rabble-rousing events where warm-up speakers encourage unruly crowds to vent hatred for the Democratic contender, Barack Obama. Cat-calls of "traitor", "criminal" and "terrorist" have been heard.