Officials hunt for plan B to bag bail out

Tuesday's rejection - not a single MP voted for the deal - saw thousands of demonstrators celebrating in the streets of Nicosia on Tuesday night over the snub of what they accurately described as bare-faced robbery.

But that has left officials desperately seeking a plan B.

Government spokesman Christos Stylianides said a meeting at the central bank discussed an alternative plan for raising funds and for reducing the €5.8 billion (£7.27bn) that must be found domestically, but would not give details.

Finance Minister Michalis Sarris flew to Moscow to investigate what aid the Russian government could provide.

"We will be here until some kind of agreement is reached," he said.

Suggestions being floated by Cypriot political parties included the securitisation of Cyprus's new gas fields and Russian involvement in their future exploitation.

President Nicos Anastasiades met representatives of the International Monetary Fund, European Central Bank and European Commission, but issued no statement. The troika must sign off on any Plan B if it is to be approved as part of the bailout.

But the potential lenders were in as much disarray as the Cypriot cabinet.

While apparently realising that their negotiators had gone too far in attempting to force bank customers to pay up out of their domestic accounts, EU members, particularly Germany, were still bullish about raiding richer savers' assets.

German Chancellor Angela Merkel said: "It is our wish that investors under €100,000 not be burdened," marking a sharp change from the deal proposed less than 24 hours earlier.

Ms Merkel went on to insist that it was "important that Cyprus gets a sustainable banking sector. The current sector is not sustainable."

Meanwhile Austria's finance minister warned that the European Central Bank could soon pull the plug on Cypriot banks.

It seemed that EU countries were still determined that Russian depositors should be hit hard, despite the fact that it was exposure to failing Greek banks that caused the damage to Cyprus.