Cyprus considers zero tax on smaller bank deposits

The Cyprus finance ministry suggests savers holding less than 20,000 euros (£17,000) would be exempt from a bank levy which has caused much alarm.

The plan was changed following outrage that ordinary savers would be forced to pay a levy of 6.75%.

A governing party MP told the BBC that party colleagues would abstain in a vote on the plan on Tuesday afternoon.

The controversial tax is a condition for Cyprus to get a 10bn-euro loan from the EU and IMF, to rescue its banks.

A debate on the bailout deal in the Cypriot parliament is now underway, but no MPs are expected to vote in favour.

President Nicos Anastasiades had previously said that parliament was likely to reject the levy, despite the modifications.

He has called an emergency meeting of political party leaders on Wednesday morning to discuss the way forward.

Mr Anastasiades has urged all parties to back the bailout, saying Cyprus will be bankrupt if the deal does not go ahead.

The president of the Eurogroup of eurozone finance ministers, Dutch Finance Minister Jeroen Dijsselbloem, emphasised on Monday that no other eurozone country would be forced to impose such a levy.