variable binding

I'm having trouble with variable binding - basically, I read that variable 
bindings declared in templates should be visible to descendants and 
following siblings, but I'm getting not getting the behavior I thought I 
would with my stylesheet using Saxon 6.5.2...

so the relevant part of my file looks like this (it's a subbranch of s):
          <ng of='proteins' role='h'>
                <nx head='targeting' role='h'>
                     <W index='92'>the</W>
                     <W role='h' index='93'>targeting</W>
                </nx>
                     <W index='94'>of</W>
                <nx head='proteins' role='k'>
                     <W index='95'>the</W>
                     <W index='96'>myosin</W>
                     <W role='h' index='97'>proteins</W>
                </nx>
	</ng>

and my stylesheet looks like this:

<xsl:template match="@* | * | comment() | processing-instruction() | 
node()">
 <xsl:copy>
  <xsl:apply-templates select="@*|node()"/>
 </xsl:copy>
</xsl:template>

<xsl:template match="s//ng//*[1]" priority="5">
	<xsl:variable name="branch">right</xsl:variable>
	<xsl:copy>
	<xsl:attribute name="branch"><xsl:value-of select="$branch"/></xsl:attribute>
	<xsl:apply-templates select="@*|node()"/>
	</xsl:copy>
</xsl:template>


<xsl:template match="s//ng//*" priority="4">
	<xsl:copy>
	<xsl:attribute name="branch"><xsl:value-of select="$branch"/></xsl:attribute>
	<xsl:apply-templates select="@*|node()"/>
	</xsl:copy>
</xsl:template>

but when I try to run it, it tells me that the variable branch has not 
been declared, even though it should first have processed the first 
daughter of ng, where it has been declared. 

Best,
shipra


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