By Mark Smulian
Councils are investing millions in nuclear missiles, attack helicopters and cluster bombs, peace activists have claimed.
The campaign said councils have collectively invested at least£723.7m in the 15 largest arms companies, with 67 funds owning shares in British Aerospace worth£244.9m, and 33 owning£19.9m worth of Lockheed Martin, the world's biggest manufacturer of nuclear weapons.
Research co-ordinator Ian Prichard said: 'We were surprised by the sheer scale of the arms company shareholdings revealed by our study.
'These investments are unnecessary from a financial point of view.'
The CAAT argued that the arms industry was not a sound investment since it depends on very large and sporadic orders that can suddenly make or break a company.
It said that the Church of England's£4.3bn ethically-invested fund was the second-best performing fund last year.
The group criticised councils' investments on ethical grounds and claimed a lack of transparency in investment policy.
'Councillors and finance directors need to account for the investment decisions to those who elect and pay them, and take responsibility for the wider consequences of their investment decisions,' it said.
Councillors oversee pensions funds, some of which cover more than one council. Their overriding objective is to make enough money to meet pension obligations.
Investment decisions are usually handled by appointed specialist firms, on which funds can impose ethical investment conditions if they choose.
The CAAT urged the public to press councils to sell arms firm shares and commit to ethical investment policies.
According to CAAT's figures the West Yorkshire Pension Fund was the largest investor in arms, with shares worth£65.1m.
Pension funds and the Local Government Association were unable to respond to the claim, citing purdah.
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