At the risk of sobering up the mood a little (and digging this sombre subject up again) - lets just have a few opinions as to what might happen if the worse comes to worse:

Let's say Greece exits the Euro in August 2012. Three months later, Portugal follows suit.

Scenario 1: We keep our savings (less than 50K Euros) in a Portuguese Bank account. The money stays safe - but reverts to the former currency and there is a devaluation.

Scenario 2: On a whim, we decide to transfer 50K Euros to our UK bank account next week, thinking it'll be safer as pound sterling (but we keep our Portuguese account open with a token sum). After Portugal reverts back to the Escudo, we decide to continue living in here and transfer our pound sterling back into our Portuguese bank account (now as Escudos).

Question: In which scenario do we stand to lose more - through the devaluation in scanario 1, or through doing the double transfer in scenario 2 ?

Its a bit like fantasy football but lets see.

Your 50,000 euros becomes 50,000 escudos . as they agree a 1 for 1 rate when Portugal leaves,
No change in Portugal , what was 1 euro is 1 escudo, You got paid 1000euros month and receive 1000 escudos.
However the financial world and the PT goverment decides that the Escudo is really only worth 75euro cents.
Your 50,000 escudos in the bank if you want to buy back into euros is only worth 37,500 euros so you will lose 25% if you leave Portugal.
Because the Escudo is now worth less imports rise in price, high inflation results, interest rates rise to help the currency and control inflation.
Your mortgage costs rise,

But Portuguese exports become cheaper and for tourists with pound or Euros Portugal becomes cheaper.

Property, over night your 200,000 euro property falls by 25% when revalued into the depressed Escudo.
But property in Portugal become very attractive to overseas buyers and eventually they start to increase.

Option 2 you move into sterling at whatever the £/Euro rate is on the day.

After the change back to the Escudo and the devaluation your £ will buy you
25% more escudos.
But of course Portugal will have inflation so it is not as good as it sounds.
As a property owner if you can pay your mortage with funds from sterling
the devaluation will help offset the rise in interest rates.
The vaule of your property in sterling terms will still have fallen.

In theory you would be marginally better of to keep your funds in sterling or Euros.

This is all of course conjecture as who knows what will happen but there is already a lot of evidence that wealthy greeks and spanish have moved their euros out of their home countries into overseas accounts.

Go with the strongest currency as it will buy you more on a foreign exchange. If you are unsure which (sterling/euro) then buy a bit of each.

There have already been conversations about countries exiting the euro -

"Meanwhile, EU financial officials told Reuters that they have discussed such options as limiting ATM withdrawals, imposing Eurozone capital controls and imposing border checks just in case Greece ends up deciding to leave the region and exit the currency."

We'll find out soon what he Greeks think when the results of the referendum are published.

what? you have 50,000 euros? I've got some great deals for you, let's talk!

Seriously though, the choice isn't between a Portuguese and an English bank; it's between an English or German account.
You definitely do not want your money in a Portuguese [or Greek, or Spanish] bank if that country were to leave the Euro.
The whole point of leaving the euro is to be able to devalue the currency; 25% is an optimistic minimum. 50% is quite possible in the short term.
Your exchange costs to the UK will be on the order of 1%, and another 1% coming back.
If you move it to a German or Dutch account, it won't cost you anything.
After devaluation, there will be massive inflation, except in Property [which will crash in Euro terms]. So you won't win; you'll just lose less.

This is why the southern banks are all flailing at the precipice; it's called capital flight. Everyone who can is moving their money out of local banks while they can.

Thanks for your thoughts so far. Scouring around the various business/financial news agencies, we find various quotes in terms of currency devaluation (as little as 10%, or as high as 50%). Rest assured I don´t have 50K Euros in Portugal, but I have managed to transfer half of my funds into my UK account. Depending on how matters play out in the next couple of weeks, I might transfer some more. My current work contract here runs until June 2013 - so I´ve got one more year of pay (either in Euros or Escudos). Six months from now the wife and I will decide whether to stay on, or move to the UK. It won´t all be a bed of roses back in the UK of course, but the job prospects for us will be better.

We are very lucky not to have a mortgage in Portugal - we bought our apartment outright back in November 2010. So we´ll always have a place to stay in Portugal. In the event of a Euro Exit, the value of the apartment will tumble - so it won´t make sense to sell it at that time. Renting it out won´t net in a great deal - but its an option. Though after a Euro exit, things can only start to get better over time (we hope!).

Our other option is to stay on in Portugal - and grab whatever jobs we can. Its disheartening reading news from Spain - science graduates having been unemployed for a year taking up jobs in ice cream shops. I´d like to believe that Portugal´s smaller economy, population, and more stringent banking regulations will prevent a total collapse. But at the same time, the lack of any growth in science/hi tec sector is worrying.

I think August will be a turning point for Greece at least. Spain & Italy have until Christmas. Portugal and Ireland may well get away with it.

It is not an easy decision either way. It is difficult to try and understand the markets at the moment and the relevant advice from the differing financial advisors/institutions. The euro is holding steady against the UKP at the moment around 1.23 - 1.25, but there is no way of knowing whether it will go up above the 1.30 in which case you will loose out for the transfer of euros to UKP. I took the gamble and got out of euros which I believe was right for me, but then again everyone has differing circumstances.
If you are getting paid for your job in euros and it then crashes, you will get paid just the same, from my own point of view and the way the current situation looks like it is heading (no one seems to be able to make a decision because the elephant is too big), I would either open a euros account in Germany/Netherlands or transfer to UKP. But that is just my thoughts on the matter.
Joao