Cyprus bailout
People queue up at a Cyprus bank ATM (Reuters)

Cyprus has postponed its parliamentary session that will decide whether Cypriots will be asked to pay a levy on their bank deposits under the conditions of the international bailout.

The emergency parliamentary session was scheduled to take place on Sunday 17 March, but it will now happen on Monday, according to the Cyprus News Agency.

The €10bn (£9bn) deal approved for Cyprus at the EU summit in Brussels would force savers to pay a levy, which has sparked widespread public anger.

Under the deal, savers have to pay up to 10 percent of their deposits, prompting many Cypriots to withdraw cash in panic. If the bank deposit levy is imposed on everyone across the country, it is expected to raise $7.2bn (£4.7bn).

The deal will also affect rich Russians who have deposits in the country, and European expatriates.

Cyprus President Nicos Anastasiades has said the terms of the bailout have to be accepted to avoid the "catastrophic scenario of disorderly bankruptcy".

Championing the bailout, he said the deal is a "painful but controlled management of the crisis, which would put a definitive end to the uncertainty and restart our economy".

The parliament will vote on the matter, though Anastasiades' ruling party does not have a majority. The Democratic Rally party has 26 seats in the 56-member parliament.

"My initial reaction is one of shock. This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night," the head of parliament's financial affairs committee, Nicholas Papadopoulos, told Reuters.

The bailout money is less than half of the package that Cyprus had lobbied for. The debt rescue package has been approved by the EU and the IMF after several rounds of talks.

"We believe the proposal is sustainable for the Cyprus economy. The IMF is considering proposing a contribution to the financing of the package... The exact amount is not yet specified," said IMF chief Christine Lagarde.

Cyprus becomes the fifth European nation to secure a bailout from its partners during the economic crisis that has now gripped the continent for three years.

The tax on savings will come into effect when banks reopen on 19 March, and electronic transfer of money has been suspended over the weekend.