(Repeats story that first ran on Friday)
* Banks ramp up insurance charges for post-vote sterling weakness
* Analysts say some investors still too complacent
* Further demand for options to weigh on fragile pound
By John Geddie
LONDON, April 10 (Reuters) - For British businesses concerned that May's election could trigger big swings in sterling, the cost of protection has surged in the past month - and any protracted talks on forming a coalition government could push it higher still.
Sterling hit a five-year low against the dollar this week while the price of currency options expiring immediately after the May 7 vote hit multi-year highs.
Meanwhile, banks are already marking up charges for contracts covering the weeks and months that follow in anticipation of a lengthy period of political horse-trading.
Yet data shows many investors are still largely unprotected against any post-election turmoil, and analysts say this could prompt a rush to seek protection as the vote nears.
"The market still seems too complacent," said Steve Barrow, head of G10 currency research at Standard Bank.
"You've got to be defensive three to four weeks subsequent to the elections. I think markets will tend to anticipate that as we get closer to the time."
Opinion polls show the ruling Conservatives and the main opposition Labour Party neck-and-neck before the May 7 vote, with Scottish nationalists likely to be the third-biggest party in the Westminster parliament.
That makes it likely that there will be a hung parliament, in which no party wins overall control, while ideological differences could prolong talks to form a government or even lead to a second election.
A parliamentary committee paper published last month warned it would take longer to form a coalition government or an informal arrangement in which smaller parties offer support on certain issues than after the last election, in 2010.
Barclays strategist Hamish Pepper said these expectations were not reflected in the price of some options, which can be used to "hedge" exposure to a currency or to bet on it rising or falling.
For instance, options that cover sterling volatility over the next three months are currently more expensive than they were before Scotland's independence referendum in 2014, but around the same as before the 2010 election.
"We think there is still room for options prices to move higher as people begin to concentrate more and more on this prospect of a prolonged coalition negotiation process," Pepper said.
Barclays' analysis of trading around the time of the Scottish referendum shows that the currency can become sensitive to a rise in the cost of volatility protection, creating a vicious circle.