DEBT-HIT Cyprus is scrambling to draw up a Plan B to secure an EU bailout after MPs rejected an unprecedented bank deposit levy, while also seeking to limit the amount of money leaving the island.
In an early setback, however, Finance Minister Michalis Sarris failed to reach progress after two rounds of talks in Moscow on assistance from Russia, one of the key planks of Plan B.
And in Brussels, the European Commission warned any new bailout must guarantee the island's debt burden is sustainable - a signal it expects Cyprus to meet a key condition of raising 5.8 billion euros ($A7.26 billion) from its own resources.
With the banking sector at a standstill and fears growing of a forced eurozone exit, President Nicos Anastasiades huddled with leaders of political parties and financial experts, trying to formulate an alternative plan that would help Cyprus confront its worst crisis since the 1974 Turkish invasion.
Anastasiades was later on Wednesday to preside over a cabinet meeting to discuss the latest developments, the presidency said.
Options being considered by the authorities, local media reported, included raising money from domestic sources including provident funds, and restructuring the teetering banking sector to reduce its debt exposure.
State radio said the Cypriot authorities were also working on bills, that would need to be passed by parliament, to restrict the outflow of cash from the island once the banks reopen.
The legislation would also split the sector into "good banks" and "bad banks", it said.
Commentators said the legislation would need to be in place before banks, which have been closed since the weekend to prevent a run on accounts, reopen their doors.
Although no official announcement has been made, few expect banks to reopen before next Tuesday, after a scheduled bank holiday on Monday.
While money is still available from ATM cash points, the dwindling liquidity in the market has seen fuel stations close their credit card facilities and many stores refusing to accept cheques.
Amid all the uncertainty, the head of the powerful Orthodox Church in Cyprus, Archbishop Chrysostomos II, offered to help by putting church assets at the government's disposal.
The church is the largest landowner on the island and also has stakes in businesses including the country's Hellenic Bank, with total assets estimated to run into tens of millions of euros.
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