Rev Donald Macaulay Minister and convener of the Western Isles Council during the BCCI crisis

But outside the island he will be best remembered as being convener of the Western Isles Council in July 1991, when the Bank of Credit and Commerce International closed its branches around the world. Five days later the news finally came out that Comhairle nan Eilean, the Western Isles Council, had suffered the largest loss in the UK, some GBP24m. The council and all connected to it quickly became the subject of international ridicule. They appeared to have made the mistake of putting all eggs in one basket, and borrowing somebody else's to put in for good measure.

It mattered little that the bank had still been on the Bank of England's list of approved banks. The Commission for Local Authority Accounts subsequently found that GBP5m had been borrowed from Scottish Widows and on-lent to BCCI, and the sum of GBP11.5m was borrowed in advance of need and deposited with BCCI. A further GBP6.6m was placed on deposit with BCCI. The problem was that the council had been specifically warned against borrowing to on-lend money in 1988.

Throughout the land, councillors began to ask questions of their officials as it emerged that such borrowing and lending deals were a fact of everyday council life, from which most elected members had somehow been spared hitherto.

In the Western Isles, the director of finance and chief executive were both sacked, although the latter was reinstated and retired soon afterwards. Officials were recommended for surcharge, but the only person to resign over the BCCI debacle was Macaulay himself. On the 10th anniversary of the bank's collapse, he told The Herald of the effects the controversy had on his colleagues on the Comhairle:

"The loss of the money at the time was not as big a blow as the reputation the council got for losing it. It discouraged councillors. I think out of fear they started writing to the press in praise of themselves and condemning others. It created a difficult situation, a difficult atmosphere within and without the council. I resigned in sympathy with the people of the Western Isles. Somebody had to stand down."

He understood that such a price was demanded of someone, but it was a hard one to pay for a man who had given so much to the civic life of the islands.

He had left school at an early age to work as a weaver and fisherman until called to do national service in the RAF. Afterwards, he joined the merchant navy and served with the Donaldson Line. But he felt called to the ministry and, after studying in Aberdeen, he was ordained a minister in the Church of Scotland in 1968 and inducted to Lemreway in South Lochs area of Lewis. He retired about about eight years ago and for the past five was the locum preacher at the vacant congregation in Bernera.

He entered local government in 1969 when he became a member of Ross and Cromarty Council Council and a member of Lewis District Council. Following the formation of the Western Isles Council in 1974 he became its first convener, serving two terms in that office and one as vice-convener. He was awarded the OBE in 1981.

In 2004, Macaulay and Father Calum Maclellan from Eriskay, who was the first viceconvener of the Western Isles Council, were made honorary freemen of the Western Isles.

Yesterday, Father Maclellan remembered his old friend. "When we elected Donald as the Comhairle's first convener we hit the nail on the head. He was the ideal man. He brought with him a wealth of experience in local government and had so many contacts on the mainland that we needed. On top of that he had his experience as a working man as a fisherman and seaman, but he was also a real Christian. With all these qualities, I think he was put there at that time when we needed him. He was a very kindly man who was always particularly concerned with the peripheral areas. I think the way he acted, the way he spread himself across the islands - that had a lot to do with cementing the Comhairle."

Macaulay is survived by his wife and three sons.