Michael Sarris, the Cypriot finance minister, sought to muffle calls for the country to weigh a precedent-setting exit from the euro to ease the economic pain inflicted by its €10bn bailout.

Cyprus faces the choice of asking for a bailout from its European partners in the euro or from Russia, and will decide where to turn after this weekend’s crucial elections in Greece, officials said today.

Cyprus could seek a European Union bailout to help recapitalise its banking sector before crucial elections in Greece this Sunday, its finance minister warned today.

Cyprus will have to seek bailout funds from the European Union to recapitalise a banking sector pummelled by exposure to Greek debt and must prepare by taking tough steps to shore up its finances, the chairman of the country's second-largest lender said today.

Cyprus is racing to meet an end of June deadline to pump €1.8 billion into Cyprus Popular Bank — which is heavily exposed to Greek bonds — but will struggle to attract investors, as long as the outcome of the Greek election is unclear.