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Isn't this something you can do with the open site explorer? Just fill in the final URL and tick the box 'link type' - 'only 301'. Sander

So, you basically (in some cases) have a canonical pointing to a URL, and then that URL 301s to a new URL? If that's the case, I think Nakul is right - it's not ideal. It's not a disaster, but you're basically putting Google through extra hops and you could be losing link-juice. Unfortunately, it's nearly impossible to calculate how much. Ideally, I'd change the canonicals to point to the new URLs.

David-  The US site could be creating the problem but there are alot of sites in europe that are starting to see the effects from penguin over the last few weeks. Depending on which specific day they saw the drop would tell you if it is the US site as oposed to the UK site. Hope this helps. Mark

I agree with Matt.  Rewrite the content. .... but, if these sites belonged to me I would probably merge them and put my entire attack into the stronger of the two.