Cyprus bailout: Finance Minister Michalis Sarris quits

Cypriot Finance Minister Michalis Sarris has resigned after completing talks on a controversial bailout deal.

Mr Sarris, 66, will be replaced by Labour Minister Haris Georgiades, reports in the local media suggest.

The 10bn-euro (£8,5bn; $13bn) deal - agreed by the EU and IMF - originally envisaged a levy on all Cypriot bank depositors, triggering public anger.

Under the revised deal, Bank of Cyprus depositors with more than 100,000 euros could now lose up to 60% of savings.

On Tuesday, the Cypriot government said that President Nicos Anastasiades had accepted the resignation of Mr Sarris, who had been under fire for his handling of the bailout deal.

Mr Sarris said that an inquiry ordered by the president into what led the island nation to the brink of bankruptcy before the bailout was agreed was a factor in his decision to step down.

"I believe that in order to facilitate the work of (investigators) the right thing would be to place my resignation at the disposal of the president of the republic, which I did," he said.

The inquiry would be carried out by a three-judge panel, President Anastasiades said.

Mr Sarris was appointed finance minister in February.

Last year he was the head of the country's second-largest bank, Laiki, whose performance was a major factor in Cyprus' near financial collapse.

Big depositors at Laiki now could face an even tougher "haircut" than those with the Bank of Cyprus. However, no details have been released.

In a separate development, Cyprus announced a partial relaxation of capital controls, raising the ceiling for financial transactions that did not require central bank approval and allowing the use of cheques to 9,000 euros per month.

However, other restrictions are still in place.