Cyprus ruling party says close to a solution on bailout crisis within...

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A solution to Cyprus's bailout crisis within the framework set down by the European Union may be possible within "the next few hours", the deputy leader of the island's ruling Democratic Rally party said on Friday.

"There is cautious optimism that in the next few hours we may be able to reach an agreed platform so parliament can approve these specific measures which will be consistent with the approach, the framework and the targets agreed at the last Eurogroup," Averof Neophytou told reporters.

Cyprus's government urged lawmakers on Friday to "take the big decisions" to save the island from a financial meltdown, saying they had only a matter of hours.

"The next few hours will determine the future of the country," government spokesman Christos Stylianides said in a televised statement before parliament was due to debate a raft of crisis measures proposed by the government.

"We must all assume our share of the responsibility," he said.

The European Central Bank said on Wednesday it would cut off emergency funds to the country's teetering banks, potentially pushing Cyprus out of Europe's single currency.

The rebuff left Cyprus looking increasingly isolated, with the deadline looming to find billions of euros demanded by the EU in return for a 10 billion euro ($12.93 billion) bailout.

Cyprus's finance minister left Moscow empty-handed on Friday after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the European Union before Tuesday or face the collapse of its financial system.

Having angrily rejected a proposed levy on tax deposits in exchange for the EU bailout, Nicosia had turned to the Kremlin to renegotiate a loan deal, win more financing and lure Russian investors to cut-price Cypriot banks and gas reserves.

Wealthy Russians have billions of euros at stake in Cyprus's outsized and now crippled banking sector.

But Siluanov said Russian investors were not interested in Cypriot gas and that the talks had ended without result.

Senior euro zone officials acknowledged in a confidential conference call on Wednesday that they were "in a mess" and discussed imposing capital controls to insulate the currency area from a possible collapse of the small Cypriot economy.

Cyprus itself refused to take part in the call, minutes of which were seen by Reuters. Several participants described its absence as troubling and reflecting the wider confusion surrounding the island's predicament.

In Brussels, a senior European Union official told Reuters that an ECB withdrawal would mean Cyprus's biggest banks being wound up, wiping out the large deposits it has sought to protect, and probably forcing the country to abandon the euro.

Cypriot banks have been crippled by their exposure to Greece, the center of the euro zone debt crisis.

LBCI/REUTERS

Cyprus ruling party says close to a solution on bailout crisis within EU rules