'Worrying time' for British in Cyprus
18 March 2013 Last updated at 16:37 GMT
The UK government will compensate armed forces service personnel, and maintain pension payments to expats in Cyprus who have faced disruption as a result of the proposed bailout.
An EU and IMF rescue package would require all bank customers to pay a levy on their savings.
Treasury Minister Greg Clark told MPs that for UK nationals with deposits in Cypriot banks, it was a "worrying time", as they would be subject to the proposals.