Weather: Economy Hit By Spring Snowstorm

By Nick Martin, Sky News Correspondent

Britain's fragile economy has been hit hard as a result of the spring snowstorm with some businesses reporting a slump in trade.

Some high street retailers say the cold snap kept customers away during what should have been the run-up to a busy Easter weekend.

Kingfisher, the owner of B&Q, reported a 13% drop in trade, while Next said it had seen a fall in sales during the bad weather.

Experts say the costs to the economy of the unseasonable weather could run into billions of pounds and threaten to impact on economic growth figures.

Some towns were cut off by the snow for up to a week making trading difficult on the high street.

In the Derbyshire town of Bakewell, which was badly affected by the snow, businesses were hoping the cleared roads would encourage locals and tourists back into the town.

Zoe McBurnie, owner of the Bakewell Tart and Coffee Shop, told Sky News that takings had dropped by £10,000 in just one week.

"The recession hasn't been too bad to us but the snow has been completely devastating.

"One minute you're busy and the next there's no-one coming in because the town is cut off by snow."

Some of the biggest losses were on farms where hundreds of livestock, including sheep, lambs and cattle, were claimed by the snow drifts.

On Nigel Birch's farm near Monyash in the Peak District, three calves lay dead on the yard, victims of the worse snowstorms there for 50 years.

Hundreds of sheep had to be taken inside and fed on expensive corn feed whilst stocks of silage were running low.

As lambing season enters full swing, newborns were left shivering in freezing conditions and had to be kept under heat lamps.

"This has been a very difficult week - one I want to forget," Mr Birch said.

"We've lost cattle, we're paying for new hay, feed and silage and in the end I think this spell will cost us between £5,000 and £10,000."

Tourism was also badly affected as roads became impassable and families chose to cancel holidays.

Nikki Dick, a B&B owner, said her diary was empty as guests were reluctant to book or could not get to her because of blocked roads.

"If I look at last year's diary for the same time it is full. This year we have a few bookings, but after that there's nothing.

"People have panicked and thought they're best to stay away.

"But the snow has been cleared, and we're all here open for business," she said.

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Cyprus Banks: President Makes Rallying Call

Cyprus' president has called on the country to "share the burden" of its financial crisis - as bank withdrawal limits remained at 300 euros.

President Nicos Anastasiades made a rallying call for understanding as queues formed outside banks on the Mediterranean island.

The banks reopened on Thursday for the first time since closing on March 16 to prevent people from draining their accounts at the height of the crisis.

The country has imposed daily withdrawal limits of 300 euros (£250) for individuals and 5,000 euros (£4,200) for businesses.

The limits are the first so-called capital controls that any country has applied in the eurozone's 14-year history. 

Depositors wait for the opening of a branch of Laiki Bank in Nicosia

Speaking at a civil servants union convention on Friday, Mr Anastasiades said: "The deal we agreed on, after the dramatic hours we all lived through last week, is without doubt painful.

"Everyone will have to make sacrifices as our financial situation, in the violent way in which it has developed, will oblige all of us to share the burden."

Despite the turmoil of the past weeks and harsh conditions of the rescue, Mr Anastasiades stressed that his country's future lay firmly within the euro.

"We are not going to leave, I stress, from the euro ... We will not, I stress, endanger the future of our country with dangerous experimentation."

Meanwhile, queues formed outside some banks just after opening time, but most were gone by mid-morning.

Financial strains are building on families and businesses, and the recession in Cyprus is likely to deepen.

Cyprus' banks became much bigger than the country's government could afford to rescue - more than seven times the size of the country's economy.

On Monday, Cyprus agreed to make the banks' bondholders and big depositors contribute to the rescue in order to secure 10 billion euros (£8.4bn) in loans from the eurozone and the International Monetary Fund.

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Cyprus Banks Finally Reopen But Anger Lingers

By Tom Parmenter, Sky News Correspondent in Cyprus

Cyprus' banks have opened their doors after the longest enforced bank holiday in Europe's history.

Queues grew outside branches across the country, with no signs of panic as employees limited the number of customers allowed in at any one time.

But many residents expressed anger at the country's controversial bailout - which requires Cyprus to raise 5.8bn euros (£4.9bn).

After a rush when the doors first opened, customers queued calmly

"They have stolen our money," Milton Loucas told Sky News.

"I have been working for 60 years. I am 80 years old. I cannot work again for my living - they have cut the lot.

"Our money, our social insurance - they have cut them. How are we going to live?"

Another Cypriot, Stelios, came out of the bank empty handed.

"I tried to get my February wages and they gave me a piece of paper only," he said.

"I have two children in the army and they asked for money - I don't have money to give them.

"The Government didn't pay anybody. My old parents didn't get their pension."

Banks are giving customers information about the capital restrictions

The country's President - who has cut his own salary by 25% - tweeted his thanks to Cypriots for showing "maturity" as the banks reopened.

"I would like to thank the Cypriot people for their maturity and collectedness shown in their interactions with the Cypriot Banks," Nicos Anastasiades said on his official Twitter account.

Cash withdrawals and other transactions are subject to tough restrictions, introduced by the country's Finance Ministry in an effort to avoid a run on the banks.

The country's crippled banking system was effectively closed down on March 16 while the terms of the 10bn euro (£8.5bn) bailout were agreed and implemented.

Large depositors face losses of as much as 40% of their savings as part of the deal, leading to fears that customers would attempt to withdraw large amounts of money when the banks reopened.

Demonstrations against austerity measures continued in Cyprus on Wednesday

As a result, strict capital controls include a withdrawal limit of 300 euros (£253) a day and a ban on cashing cheques.

Travellers leaving the country can only take up to 1,000 euros (£845), or the equivalent in foreign currency, with them in cash - significantly less than expected.

Police and security staff were deployed to maintain order at branches, and G4S guards called in to work alongside police officers and other security firms across the country.

The giant global firm was the contractor that failed to meet their promises over security at the London Olympics prompting the British military to step in.

G4S's managing director in Cyprus, John Arghyrou, told Sky News: "I feel we have the resources, I feel extremely confident as a security company that we can undertake and meet the requirements of our customers."

With just 860,000 people, Cyprus has around 68bn euros (£57bn) in its banks.

This outsized financial system attracted deposits from foreigners but has struggled since investments in neighbouring Greece went sour.

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Deloitte Boss Blames Law For Tax Avoidance

The chief executive of one of the big four accountancy firms, Deloitte, has blamed UK law for the money lost as a result of tax avoidance.

Speaking on Jeff Randall Live, David Sproul admitted that the problem with the tax system is "mainly the law".

He said: "There's clearly tax practices that take advantage of the rules that the Government has brought in.

"The real question is the extent to which that is accepted. And I think there's no question that business recognises that what is acceptable has changed."

As an example of a practice no longer deemed acceptable, he cited the way banks used trust arrangements to pay bonuses to employees that meant they avoided national insurance and allowed them to defer the tax on those bonuses.

"That was widely accepted and was at the time widely used, we would have advised clients on it at the time. But we would not do that now."

In the middle of the Government's stringent austerity programme, large companies that have avoided paying tax legally have prompted much public anger and protests in recent times. Ministers are also anxious to do what they can to bolster the UK's public finances in the gloomy economic climate.

In his recent Budget, Chancellor George Osborne announced a series of measures to clamp down on aggressive tax avoidance and evasion in a bid to deliver an extra £4.6bn to the Exchequer.

The new initiatives included the immediate closure of 10 loopholes; the naming and shaming of those who promote tax avoidance schemes; and a new focus on offshore tax evasion through agreements with havens such as the Isle of Man, Guernsey and Jersey.

Mr Osborne also announced a tightening of the rules for companies that choose to arrange loans, which do not attract tax, for their directors or shareholders in place of taxable salaries or dividends.

Mr Sproul said "a lot" of the current tax gap was "at the small business and sole trader end".

"Some of it clearly is at the large business end and goes to some of the points (the Chancellor) is talking about," he added.

He denied claims that accountancy firms like his own used alleged staff shortages at HM Revenue and Customs to their advantage.

"The complexity (of the tax system) is what creates the problem, not the fact that HMRC may or may not have too few staff."

Mr Sproul welcomed the Chancellor's focus in this month's Budget on making the UK's tax regime more competitive, including the move to cut corporation tax to 20% from 2015. That was "very attractive, very important and does create jobs", he said.

He added that the reason "there is not a flood of companies coming to the UK now is not about the tax system, it's about the broader uncertainty in the economy".

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Cyprus Banks In 'Race' Ahead Of Reopening

By Tom Parmenter, Sky News Correspondent

Banks in Cyprus are in a "race against time" to be ready to reopen their doors today.

For nearly a fortnight banks have been closed after Cyprus was plunged into its biggest crisis since the Turkish invasion of the island in 1974.

The terms of the EU bailout agreed in Brussels mean there has been a state of financial limbo and widespread confusion.

Cheques have not been banked, people have not received their wages and regular payments have not been processed.

Thousands of people are expected to descend on the banks when they finally reopen their doors. One employee at his desk at the doomed Laiki bank told Sky News colleagues were in a "race against time" to be ready.

Police and security staff will be deployed to maintain order at branches and are hopeful of preventing a mass run on the banks.

An out-of-order cashpoint in Nicosia. Most machines are said to be working.

Staff from G4S have been working 24/7 since this crisis began ensuring cash machines have been filled up night after night.

The giant global firm was the contractor that failed to meet their promises over security at the London Olympics prompting the British military to step in.

G4S's managing director in Cyprus, John Arghyrou, told Sky News: "I feel we have the resources, I feel extremely confident as a security company that we can undertake and meet the requirements of our customers."

Some 180 guards will be deployed to banks across Cyprus to work alongside police officers and other security firms.

Mr Arghyrou added: "It is not really guarding it is assistance services ... but close co-operation with the police is essential."

A spokesman for the Cypriot police told Sky News he was "unable to disclose" full details of their plans but said they do not expect to need officers at every branch.

Cypriots protesting against austerity measures

People will be limited in the amount of money they can withdraw. Early reports indicated there would be a 300 euro (£253) cap on withdrawals and a limit of 3,000 euros (£2,530) on the amount of cash individuals can take abroad.

The use of credit and debit cards abroad is reportedly going to be being restricted to 5,000 euros (£4,223) a month, while the cashing of cheques is set to be banned.

Hari Tsoukas a business analyst in Nicosia told Sky News: "In the short term it maintains our position as a very peculiar member of the eurozone - nowhere else has these kind of capital controls but on the other hand it is necessary.

"People are angry. Communications with customers has been non-existent.

"The crisis management has been appalling, the best thing would be to set up some kind of hotline so at least people can call to get information."

Most banks in Cyprus will reportedly reopen at midday on Thursday, which is 10am UK time. They are due to stay open until 6pm local time, 4pm in Britain.

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Cyprus Imposes Limits Ahead Of Bank Reopening

Cyprus Bank Controls 'To Remain'

Updated: 7:07pm UK, Wednesday 27 March 2013

By Ed Conway, Economics Editor

Well that's a relief! The initial leaked documentation detailing how capital controls will work in Cyprus says they will only be temporary.

Of course, were one to look through history at episodes of international monetary breakdown, you'll find that most of the seminal, permanent measures which brought economic systems to an end were also described as temporary.

Iceland's capital controls, for instance, were "temporary" when first introduced in 2008. They are still in place, "temporarily", five years later.

When Britain left the Exchange Rate Mechanism in 1992 it was described by the Chancellor as a "temporary" measure.

Indeed, as far as many were concerned, when in 1971 Richard Nixon closed the gold window - a momentous moment that brought the Bretton Woods system to an end and landed us in a world of floating exchange rates - it was branded a "temporary suspension" as well.

And this is before one gets to the hackneyed example of income taxes which, when William Pitt the Younger introduced them in the UK in 1799, were supposed to be temporary too.

In other words, in economics it pays to be sceptical when someone insists something is only temporary. And, as I laid out in some detail in a previous post, if Cyprus has permanent capital controls, it will permanently cease to be a euro member.

So we will watch with interest and some scepticism Cyprus's efforts to try to dismantle the controls in a week's time.

Particularly since we now know they will be even less subtle, even less avoidable, than was anticipated: a ban on taking 3,000 euros of cash out of the country; a block on cheques being cashed unless they're intra-branch; limits on credit card spending overseas. It's clear that the country is constructing an iron ring around its borders.

And, clearly, a euro in Cyprus won't be worth the same as in other euro members.

Of all the feats Cyprus will have to surmount in the coming months and years to escape from its current predicament, taking down these "temporary" capital controls will be among the most difficult.

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Energy Bill Hikes 'Cut By Efficiency Schemes'

A new report claims government policies helping to insulate homes and promoting the installation of more energy efficient boilers are reducing the rise in gas and electricity bills.

Savings generated from energy efficiency policies are already having an impact and will increase over the next decade, the report from the Department for Energy and Climate Change (DECC) has said.

Household dual fuel bills are estimated to be on average 5%, or £64, lower now than they would be without these policies, it adds.

By 2020, average household energy bills will have risen by 6% in real terms but will be 11% or £166 lower than without the policies.

Nearly half of the average household dual fuel energy bill, £598, is made up of fossil fuel prices, with the second largest cost attributed to networks costs or transport or distribution of energy.

The report showed 85% of the rise in household bills between 2010 and 2012 was from wholesale energy costs and network costs.

Household energy consumption has been on a downward trend since 2005 partly because of the energy efficiency measures.

The freezing weather has raised concerns about gas supplies

Energy and Climate Change Secretary Ed Davey said: "Global gas price hikes are squeezing households. They are beyond any Government's control and, by all serious predictions, are likely to continue rising.

"We are doing all we can to offset these global energy price rises, and while we have more to do, this new study shows our policies are putting a cushion between global prices and the bills we all pay."

Steve Radley, policy director at EEF, the manufacturers' organisation, said: "This is a  wake-up call. Policies are already adding 30% to business electricity prices, and this will rise to 50% by 2020 and 70% by 2030.

"Measures to shield the most energy-intensive industries from a portion of the costs will make a difference but, unless we get a grip on spiralling policy costs, steeply rising electricity prices for the rest of the sector risk making the UK an increasingly unattractive location for industrial investment and undermining efforts to rebalance the economy."

Caroline Flint, shadow energy and climate change secretary, said: "The Government's underhand attempt to mask the real impact of its policies on families' energy bills is shameful. At a time when hard-pressed families and pensioners are seeing their incomes squeezed, only this out-of-touch Government could expect people to fork out thousands of pounds on new TVs, fridge freezers and washing machines.

"Instead of cooking the books to trick people into thinking their energy bills will be lower, ministers should get behind Labour's plans to overhaul the energy market and deliver fair prices for the public."

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Banks Facing £60bn Capital Shortfall

Britain's banks are expected to be told today they face a capital shortfall of up to £60bn as the Bank of England delivers its verdict on the strength of the sector.

The Bank's Financial Policy Committee (FPC) will reveal the scale of the balance sheet pressure in the banking industry and its decision on how to tackle the collective capital hole.

Banks are already braced for grim news after the FPC warned in November that the shortfall in capital needed as a cushion against future crises could be as high as £60bn in its worst-case scenario.

Lenders - such as The Co-operative Bank - have already been taking action to boost their balance sheets after discussions with the Financial Services Authority (FSA).

But it is thought the FPC believes banks will have to go further and raise more than agreed with the FSA, which is set to be axed on Monday as part of a major regulation overhaul in the UK.

In its quarterly report on liabilities and financing in the sector, the Bank yesterday said that capital levels remained broadly unchanged so far this year, although they were expected to rise in the next three months.

It had expected capital levels to have already started increasing.

A number of players are understood to have been given orders by the FSA to beef up their capital cushions, with the Co-operative Bank reportedly warned over a potential £1bn shortfall.

There are fears that state-backed lenders Royal Bank of Scotland and Lloyds Banking Group are also significantly under-capitalised and may be told to bolster their balance sheets with large capital raisings.

The Treasury is expected to make it clear that the taxpayer will not foot the bill and that there will be no more direct state support for RBS and Lloyds.

Instead, the FPC is likely to allow the lenders an extended period to come up with measures to build up their capital buffers.

They have already started making efforts to appease concerned regulators, with RBS recently agreeing to float a stake in its US business Citizens, while Lloyds has raised £500m by selling part of its stake in fund manager St James's Place.

Today's statement is seen as a pivotal one for the FPC, whose job it is to spot and prevent another financial crisis.

It is also the pillar of the new regulatory regime introduced by the coalition, which comes into force on April 1.

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Cyprus Facing 30% Unemployment Amid Crisis

By Tom Parmenter, Sky Correspondent, In Nicosia

Cyprus is facing a recession so deep that 30% of people may find themselves unemployed.

The EU bailout means massive restructuring of the financial system, the inevitable loss of many investors and thousands of people seeing their jobs disappear.

Professor Hari Tsoukas, a business analyst, told Sky News: "Unemployment is likely to at least double from 14% to at least 25% and possibly up to 30%. Not so long ago it was just 5%.

"It is a huge challenge now facing the Cypriot people, we have been resilient before and we will need all that again," he added.

For a week now people have been rationed to how much they can withdraw from cashpoints.

Wages have not been paid, businesses have been unable to pay suppliers and the whole economy has seized up.

Banks have been closed since March 16 but Cyprus' president Nicos Anastasiades has said they will reopen on Thursday.

A woman and child beg for money in Nicosia

However, he added that the island will introduce some limits on transactions to prevent a huge outflow of money.

Politicians have been struggling to come up with a plan that would raise enough funds to qualify for an international bailout.

In a televised address to the country, the president said: "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed."

He did not specify what limitations would be imposed on transactions.

He said he had taken "painful decisions to save the country from bankruptcy" and pledged Cyprus "would find its feet again".

It follows a bailout deal which reports suggest could see Bank of Cyprus savers with deposits above 100,000 euros (£85,000) hit with a levy of "around 30%".

In a smart fourth floor apartment Sky News met one Cypriot woman prepared to show us where she has been stashing her money.

Fearful of losing control of her cash by leaving it in the bank she now has a daily routine of hiding it in drawers or cupboards around her bedroom.

She didn't want to be identified but said: "You just want to know your money is safe, this is quite small scale but it is all I can do."

Her flat was burgled last year so she is taking no chances - every time before she leaves home for over an hour she collects together her growing stash of notes and takes it with her stuffed in her handbag.

She hates having to do it but while banks remain closed some people feel they have little option but to take control of their own money.

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UK Helicopter Search And Rescue Ops 'Sold'

By Alistair Bunkall, Defence Correspondent

The Government is selling off UK helicopter search and rescue operations to a US-based company, according to Sky sources.

The Bristow Group, which is headquartered in Texas, has won the contract to run the service from 2015 to 2026.

The exact value of the deal has not been confirmed, but it is expected to be in the region of £3bn.

An official announcement by the Government will be made at 7am on Tuesday before the stock market opens.

It marks the end of 70 years of search and rescue operations by the RAF and Navy.

The distinct yellow RAF Sea King helicopters and grey and red Navy versions were already due to retire from service in 2016.

Upkeep costs and the cost of extending their life has been deemed too expensive.

The move is also in keeping with a wider re-shaping of the military in the face of budget cuts and the 2014 withdrawal from Afganistan.

But the Sea King has been the work-horse of the skies, both in a combat and peacetime capacity, and whatever the merits of this decision, it will be missed by many.

Few other aircraft have so many memorable moments associated with them but the Sea King will long be remembered for its part in the Falklands conflict and the Fastnet race in 1979 when it helped rescue sailors from ferocious seas.

Bristow will operate the service using Sikorsky S-92 and Augusta Westland 189 helicopters.

It is understood that the technology they will introduce is so advanced that the US State Department had to give its approval for it to be used in the UK.

Bristow already provides transport services in the UK to ferry oil-rig workers to and from North Sea platforms.

The company has had a presence in Europe for more than 50 years and also operates in Australia, West Africa, Russia and Malaysia in addition to North America.

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Cyprus Bailout Deal Wins Eurozone Approval

Cyprus has secured a 10bn euros (£8.5bn) EU bailout saving the country from a banking system collapse and bankruptcy.

In return for the rescue funds, Cyprus must restructure its banking sector under a troika plan approved by eurozone ministers earlier today.

The country's second-largest bank, Popular Bank of Cyprus, known as Laiki, will effectively be shut down and split into a "good bank" and a "bad bank".

Deposits below 100,000 euros (£85,509) in Laiki will be safeguarded and transferred to the Bank of Cyprus, the country's largest bank.

IMF's Christine Lagarde and the German finance minister at the Eurogroup

Deposits above 100,000 euros, which under EU law are not insured, will be frozen and will be used to resolve debt. It's not yet clear how severe the losses will be for these depositors.

The move will yield 4.2bn euros (£3.6bn) overall - the bulk of the 5.8bn euros (£4.9bn) Cyprus needed to raise as part of the bailout conditions.

The deal emerged hours before a deadline to avert a collapse of the banking system, which could have forced Cyprus to exit the euro.

It followed fraught negotiations between Cypriot President Nicos Anastasiades and the troika of creditors - the International Monetary Fund, European Commission and European Central Bank.

Banks have been closed this past week

"We've put an end to the uncertainty that has affected Cyprus and the euro area over the past week," said Jeroen Dijsselbloem, who chairs the meetings of the 17-nation eurozone's finance ministers.

"We believe that this will form a lasting, durable and fully financed solution," said Christine Lagarde, chief of the IMF.

After the eurozone's finance ministers' approval, several national parliaments such as Germany must also approve the bailout deal, which might take another few weeks. EU officials said they expect the whole programme to be approved by mid-April.

Cyprus' Finance Minister Michalis Sarris said: "It's not that we won a battle, but we really have avoided a disastrous exit from the eurozone. A long period of uncertainty and insecurity surrounding the Cyprus economy has ended."

Cyprus's outsized banking sector was crippled by exposure to crisis-hit Greece.

In a vote on Tuesday, the country's 56-seat parliament dismissed a levy on depositors as "bank robbery".

The country's finance minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia, whose citizens have billions of euros at stake.

Cypriots were outraged by the original proposal and have been queuing at cash machines ever since bank doors were closed last weekend on the orders of the government.

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Airlines 'Should Charge Fat Passengers More'

Airlines should make heavier passengers pay more for their plane tickets and lighter ones less, it has been suggested.

The controversial pay-as-you-weigh pricing scheme has been mooted by a Norwegian professor who argues that weight and space should be taken into account by airlines pricing their tickets.

Writing in this month's Journal of Revenue and Pricing Management, Dr Bharat P Bhatta has put forward three proposals.

:: Fare according to actual weight: Charging passengers according to how much they and their belongings weigh, fixing a rate for kilograms per passenger so that a person weighing 60kg (132lbs or nine stone 6lbs) pays half the airfare of a 120kg (264lbs or 18 stone 12lbs) person;

:: Base fare minus or plus an extra charge: This option involves charging a fixed base rate, with an additional charge for heavier passengers to cover the extra costs. Every passenger could have a different fare according to this option;

:: Same fare if the passenger has an average weight, but discounted/extra fare for low/excess weight below/above a certain limit. This option results in three types of fares: high fares, average fares and low fares.

Dr Bhatta, of the Sogn og Fjordane University College in Norway, thinks the third option is most suitable for implementation.

"Charging according to weight and space is a universally accepted principle, not only in transportation, but also in other services," he said.

"As weight and space are far more important in aviation than other modes of transport, airlines should take this into account when pricing their tickets."

Dr Ian Yeoman, editor of the Journal of Revenue and Pricing Management, threw his weight behind the suggestion.

"For airlines, every extra kilogram means more expensive jet fuel must be burned, which leads to CO2 emissions and financial cost," he said.

"As the airline industry is fraught with financial difficulties, marginally profitable and has seen exponential growth in the last decade, maybe they should be looking to introduce scales at the check-in."

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Thousands Of Jobs Saved As Blockbuster Bought

The troubled DVD and games rental chain Blockbuster has been bought, saving 2,000 jobs and 264 UK stores.

Administrators from accountants Deloitte said restructuring specialists Gordon Brothers Europe had purchased the company for an undisclosed sum.

Blockbuster collapsed in January amid competition from internet firms and the digital streaming of movies and games.

Joint Administrator Lee Manning, said: "Having identified a profitable core portfolio of stores we are pleased to have achieved this sale for creditors.

"Together with the previously announced store sales more than half of the original estate has been secured for ongoing use.

"This transaction provides Blockbuster a future in the UK and we owe a special vote of thanks to all the company's employees, suppliers and customers for helping us rescue the business."

Commenting on the acquisition, Frank Morton, the CEO of Gordon Brothers Europe, said: "We are delighted to announce the acquisition of Blockbuster.

"We acknowledge the industry is in transition; we know that we have a challenge ahead but there is still a market to be served.

"Blockbuster has a strong brand affinity and we believe that with the right mix of new product offering, new technologies, strategic management and marketing, we can bring new life to this high street staple.

"We look forward to working with employees, suppliers, landlords and other stakeholders to make this happen."

Blockbuster had struggled to adapt to the changing market amid rivalry from internet retailers including Netflix, Amazon's LoveFilm and iTunes, which now offers a movie rental service.

The devastating impact of the internet on Britain's high streets had already been laid bare by the demise of camera chain Jessops and electricals group Comet, which also cited competition from online players as a major reason for their decline.

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Cyprus Agrees 20% Tax On Bank Deposits

Politicians in Cyprus have reportedly agreed a new one-off levy on savers in order to secure a European bailout.

The measures, yet to be confirmed by the country's President, include a 20% tax on savers with deposits over 100,000 euros at the country's largest bank, the Bank of Cyprus.

A 4% tax on deposits over 100,000 euros would be levied at other banks, a senior Cypriot official told Reuters.

Cyprus has to raise 5.8bn euros by Monday or face being kicked out of the single currency.

Eurozone finance ministers are due to meet on Sunday evening to see if the numbers Cyprus has agreed with its international lenders add up.

Bank workers shout during a protest outside the presidential palace

Cypriot President Nicos Anastasiades tweeted: "We are undertaking great efforts. I hope we have a solution soon."

The conservative leader, barely a month into the job and wrestling with Cyprus's worst crisis since a 1974 invasion by Turkish forces split the island in two, was due to lead a delegation to Brussels, also on Sunday, to meet heads of the "troika" - the EU, the European Central Bank and International Monetary Fund - in a sign a deal might be near.

Government officials held talks throughout Saturday at the finance ministry with troika lenders. Angry demonstrators outside chanted "resign, resign!"

Its outsized banking sector crippled by exposure to crisis-hit Greece, Cyprus needs to raise the 5.8bn euros in exchange for a 10bn euro EU lifeline to keep the country's economy afloat.

But in a vote on Tuesday, Cyprus's 56-seat parliament rejected a levy on depositors, big and small, as "bank robbery", and the country's finance minister Michael Sarris spent three fruitless days in Moscow trying to win help from Russia, whose citizens have billions of euros at stake in Cypriot banks.

Rebuffed by the Kremlin, Mr Sarris said earlier on Saturday that talks with the troika were centred on a possibly levy of up to 25% on savings over and above 100,000 euros at failing Bank of Cyprus.

However, the situation remains fluid and other options, including a "voluntary haircut" in exchange for equity that would not require parliamentary approval, are said to still be on the table.

Ordinary Cypriots were outraged by the original proposal, and have been besieging cash machines ever since bank doors were closed last weekend on the orders of the government to avert a massive flight of capital.

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