The Cypriot government and eurozone finance ministers have agreed a €10bn (£8.5bn) bailout deal that includes a levy on deposits over €100,000.
As part of the restructuring, the country’s second largest bank, Laiki, will be wound down split into good and bad units and eventually merged with the Bank of Cyprus - following a model devised by the UK government to deal with Northern Rock.
Deposits over €100,000 will be subject to a one-off tax, the rate of which has yet to be agreed, and all deposits under that amount will be fully guaranteed.
Cypriot banks - including Laiki, which has branches across the UK - said that UK deposits will not be affected.
Last week the Cyprus government postponed a referendum on a deal that would...