The UK branches are covered by our FSA so would be treated differently - stand alone in their right. It doesn't follow they could transfer funds from Cyprus - only use funds held here in the UK be they in £'s or €'s.

the UK Laiki branches will be bought by the UK.

I had later picked up on what you posted but forgot to edit my own post.

Britain is trying to orchestrate a rescue of the UK branches of a troubled Cypriot bank, the chancellor revealed on Tuesday, as he criticised the handling of the bailout for the tiny island at the forefront of the eurozone's debt problems.

With Cyprus battling to open its banks on Thursday for the first time in 12 days, George Osborne revealed that a further €13m (£11m) in cash had been flown in for use by troops stationed there.

The Cypriot finance minister, Michalis Sarris, warned of a "significant" haircut on savings accounts holding more than €100,000 – which could see at least 40% wiped off deposits. "The exact percentage is not yet decided but it is going to be significant," said Sarris, who had hoped to get Russia to contribute to the €10bn bailout, given the large number of its citizens expected to lose billions of euros on deposit in the island's banks.

Osborne told MPs on the Treasury select committee that the British government was looking at ways to stop the UK arm of Cyprus's second largest bank, Laiki, being "sucked" into the bailout, under which Laiki is to be wound down. Customers with deposits of less than €100,000 will be transferred to the country's largest bank, Bank of Cyprus. "I can say the Treasury is working with the Cypriot authorities on a British solution to the branch of the Cyprus Popular Bank ," he said.

http://www.guardian.co.uk/business/2013/mar/26/treasury-laiki-bank-uk-cyprus-bailout