Tim
It sounds very much like the Acheson plan. In practice it brings back those dark days of the early 60s when we ALL knew that both sides were arming to be ready for the showdown that eventually came in 1963. With a Turkish base on the island the temptation to be armed and ready just in case will surface all over again.
I think demilitarised in the sense offered by the Greek Cypriot side does not include the SBAs. They are a law unto themselves till they go I guess. But the rest of the island can be army free. In essence, given the proximity, he new Cyprus will be under Turkish military dominance. A destroyer doing cruising speed can get from Mersin to Cyprus in one hour. A jet can get there in two minutes and a helicopter in ten. Karpasia will be closer in terms of time to Turkey than to the Akrotiri base.