Britain flew e1million (£860,000) in cash to Cyprus yesterday to bail out Armed Forces personnel affected by the banking crisis.
Officials said the money, taken on a regular RAF flight to Cyprus, would be available for emergency loans to those unable to obtain cash.
More money could be sent if required, the British Ministry of Defence said.
About 3,000 Armed Forces personnel serve in Cyprus, where Britain has a large base. The potential levy on Cypriot bank accounts, part of a European Union bail-out package, has raised the prospect of British Service personnel and officials losing out.
Government attempts to reassure them over that threat have run into confusion.
George Osborne, the British Chancellor, promised to cover all military losses in Cyprus, telling Servicemen on Sunday that he would "compensate anyone who is affected by this bank tax".
Greg Clark, a British Treasury minister, told UK MPs on Monday that the Treasury would cover only "reasonable losses" incurred by British personnel, raising the prospect that those with large holdings in Cyprus would not be protected.
Mr Osborne told a Cabinet meeting yesterday that he would ensure that "UK personnel will be compensated in full". (© Daily Telegraph, London)