Rules of the road please help

[Fazerider]

This actually almost happened yesterday morning. I work with both fellas, the green car driver and the cyclist. A bit of an atmosphere at work to say the least.  :rolleyes
Imagine the drivers surprise when he nearly fubar'd a work colleague, he was none to happy, the cyclist was a bit sheepish so I guess he accepts that he wasn't totally in the right.
The drawing is the irate green car drivers handiwork- he does have a green car funnily enough, a mk3 1974 Cortina. buit he wasn't in that at the time. S[size=1em]o the consensus is as far as the law goes the driver is at fault not the cyclist?[/size]

Both were at fault.
Obviously the green car shouldn't have pulled out without making sure he wouldn't obstruct other road users... someone flashing their lights doesn't alter the fact that traffic on the main road has priority. Indeed, if the green car had been driven into by the car that flashed him it would have been the driver of the green car at fault.
However... the cyclist was overtaking at a road junction (contravening Highway Code Rule 167). Yes, we all do it, particularly in big cities where there's a road junction every few dozen metres, and the wording is "DO NOT" rather than "MUST NOT", but insurers will generally go 50:50 responsibility if there is a collision of this nature.