Millions of pounds of public money has been lost on investing in a community bank that has now gone into administration.

Hampshire Community Bank provided loans to help small businesses across the county.

The Winchester-based operation opened in 2014, with founding investment from councils, universities and a community interest company.

The bank’s board decided to put the company into administration after struggling to pursue an aim of becoming a retail bank. The bank

The University of Southampton has lost £300,000 in payments made. It had planned to invest up to £400,000.

Southampton Solent University had planned to invest £100,000 - but had spent £75,000 before the bank went into administration.

Eastleigh Borough Council has lost £375,000 after investing in the scheme.

Winchester City Council has lost £188,000 out of the £250,000 earmarked for the bank.

Investors stopped pouring in cash last year when the bank foundered. At the time they told the Echo that there had not been "sufficient progress to satisfy independent assurance advisors that a banking licence can be successfully obtained".

Portsmouth City Council’s £3.75million contribution provided the majority (60 per cent) of the funding for the community bank.

A University of Southampton spokesperson said: “Our involvement in Hampshire Community Bank was made following all the appropriate due diligence checks and an expectation that this enterprise would bring benefits for our local communities, while delivering a reasonable return on investment.

“We are therefore disappointed by this news.”

A Southampton Solent University Spokesperson said: “It is vital that universities work with their local communities, championing worthwhile initiatives and providing support where possible.

“As a minor investor in the Hampshire Community Bank, it is clearly disappointing that this venture has not been successful.

“However, thanks to careful planning this will have no impact on our current or future finances.”

The goal of becoming a retail bank required the company to licensed by regulators.

This was not possible with the funding available and within the necessary timescales, Portsmouth City Council said.