Moscow is heavily invested in Cyprus but is in no rush to help out, writes Felix Salmon

It is still unclear who is taking charge of talks to save Cyprus. Is it Europe or Russia, asks Mike Peacock

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.

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 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.

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.