COUNCILS across Merseyside and Cheshire are pouring more than £28m into the world's largest arms companies, The authorities are helping finance nuclear warheads by investing pension funds in controversial US manufacturer Lockheed Martin, figures showed last night.
Released under the Freedom of Information Act (FOI), the figures also revealed more than £10m has been pumped into BAE Systems, the UK's largest weapons maker.
And £3m is invested in Halliburton, the scandal-hit military services corporation heavily involved in US foreign policy.
Anti-war campaigners last night urged the councils to withdraw the funds, saying they represented "unethical" decisions made without the knowledge of voters and employees.
Ian Prichard, a researcher at Campaign Against the Arms Trade (Caat), which conducted the FOI exercise, said: "We knew local authorities had funds in UK arms companies.
"But this was the first time we had used FOI properly, and we were surprised to find they had investments in the large US corporations."
Mr Prichard said the group would be asking councils to set up policies banning such investments.
He said: "It wouldn't be a big deal for them to have such policies. Although these figures look big, they do not form a large proportion of the authorities' investment portfolios.
"Merseyside has a total equity for shares of £2.3bn, so the amount it holds in the arms trade is not a vast percentage.
"Councils are all about public money for the public good. Surely, they can take this money away from the least pleasant companies and use it ethically in a way that benefits society more."
Leaders from Unison, which represents council workers, said the revelations could rock current talks with the Government over the future of the Local Government Pension Scheme (LGPS).
Glen Williams, convener of Unison's Sefton branch, said: "It takes the whole concept of ethical investment onto a completely different plane.At a time when we are supposed to be exploring ways with the Government as to how we can protect our members, it is obscene to see this money being paid towards such disgraceful aims.
"This could not have come at a worse time for the Government. I suspect Unison at a national level will want to see the exact details of these pension funds."
But council officials defended the investments, saying they benefited public sector workers.
A spokesman for Cheshire County Council, which manages the county's pension fund, said: "I can only talk on behalf of the county council, but as far as we are concerned, our first responsibility is to secure a good return on investment for our members to ensure they have decent pensions to reward years of hard work."
"There are always two sides to every argument and some people might believe that investing in such companies is both helping to strengthen national defence and protect local jobs."
The spokesman said the authority only made up 30% of the fund's 60,000-strong membership, which comes from 86 organisations such as the civilian section of the police force and parish councils.
MPs to be lobbied
AMNESTY International members will lobby MPs today for tough controls on the multi-billion pound international arms trade.
Some 200 people are expected to descend on Parliament as a new report reveals a network of weapons transporters and brokersfuelling the world's bloodiest conflicts