UK sends plane-load of cash to Cyprus for its troops

LONDON (Reuters) - Britain sent a military plane carrying 1 million euros ($1.3 million) in cash to Cyprus on Tuesday for its troops on the island in case cash machines and bank cards stop working, the defense ministry said.

About 3,500 British military personnel are based in Cyprus, which has been granted a 10 billion euro bailout. But a tax on its banks' depositors as part of the deal sparked outrage and rattled financial markets.

"An RAF (Royal Air Force) flight left for Cyprus this afternoon with 1 million euros on board as a contingency measure to provide military personnel and their families with emergency loans in the event that cash machines and debit cards stop working completely," the Ministry of Defence said in a statement.

"We will keep this under review and consider further shipments if required."

British troops in Cyprus will be given the choice of having their monthly wages paid into British bank accounts rather than Cypriot ones in future, the statement added.

The European Union and International Monetary Fund are demanding Cyprus raise 5.8 billion euros from depositors to secure its bailout, needed to rescue its financial sector.

Cyprus's government is working on a new proposal that could spare smaller savers from the levy after the original plan drew an angry response.

(Reporting by Peter Griffiths; editing by Stephen Addison, John Stonestreet)