Cyprus has clinched a last-minute solution to imminent financial meltdown by agreeing to take up to almost half of the bank savings of the wealthiest, and avoided a disastrous exit from the eurozone, according to the country's finance minister.

The European Union said today a top official will chair a high-level meeting on Cyprus in a last-ditch effort to seal a deal before finance ministers decide whether the island nation gets a €10bn bailout loan to save it from bankruptcy.

Politicians in Cyprus are racing to complete an alternative plan to raise the funds necessary for the country to qualify for an international bailout, with a potential bankruptcy just three days away.

As Cypriot politicians raced to find a new financial rescue plan ahead of a Monday deadline, tensions built in the streets of the capital. Residents withdrew what money they could from ATMs amid fears the banks could collapse.

Cyprus has four days to agree on a new plan to raise funds to avoid bankruptcy after the European Central Bank warned that it would pull the plug on the country’s banks at the start of next week if no bailout deal is agreed.

Markets calmed down yesterday from all the excitement over whether the Cypriot economy and banks would implode as they sought an alternative source of funding having rejected the conditions for an EU/IMF bailout.

Cyprus’s government has drawn up a new plan to raise funds needed for the country to secure a crucial international bailout, three top government officials said.

Cyprus is trying to come up with an alternative plan to stave off bankruptcy after parliament rejected a scheme to seize up to 10% of people’s bank savings.

Financial officials in Cyprus are working on a revised plan to secure an international bailout which will ease the pain on small bank account holders of a plan to seize deposits.

The Cyprus bank account levy plan sent has sent shockwaves across Europe with savers in other countries now fearing their money may not be safe.

Cyprus has postponed its parliamentary vote on a bank deposits levy by a day.

Nervous depositors in Cyprus rushed to ATM machines today to drain their accounts following a bailout agreement with international creditors that includes a levy on all the country's bank accounts.

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.