Cyprus holds presidential vote as bankruptcy looms

Cypriots voted on Sunday for a new president to rescue the recession-hit EU member state from bankruptcy, in an election seen as one of the most crucial since independence.

Nicos Anastasiades, 66, of the rightwing main opposition Disy party, is tipped to win the first round in which 550,000 Cypriots are eligible to vote, perhaps crossing the 50-percent threshold that would avoid a run-off a week later.

He has the support of the centre-right Diko party in the race for the presidency, which unlike in previous polls on the normally affluent but divided island has focused on the economy rather than elusive efforts at reunification.

Polling stations opened at 07:00 (0500 GMT) and were due to close at 18:00, to be followed almost instantly by exit polls and the results expected less than three hours later.

After voting in the southern coastal resort of Limassol, Anastasiades said the stakes were no less than the "survival of the country and nothing else."

The frontrunner's closest challenger for the Greek Cypriot leadership was former health minister Stavros Malas, 45, a British-educated independent backed by the currently ruling communist AKEL party.

"This is a day for the most important chapter in the history of the Cypriot people to be written," Malas said after voting in the capital on a crisp and sunny spring day in the eastern Mediterranean.

"I am trying to choose the best out of the worst," accountant Christodoulos Kyriakides said at a Nicosia polling station. "I want someone who will do the best for the economy without being a sellout" to foreign powers.

Anastasiades, who led Malas by 20 percentage points in polls, is seen as someone the Europe Union can do business with, while his stance on ending the division of Cyprus is more flexible than his rivals.

The most pressing task facing the next president as he starts a five-year term will be to agree terms with a troika of lenders on a bailout to save the island's Greek-exposed banks and failing economy.

The European Commission, European Central Bank and International Monetary Fund are awaiting the election result before offering the terms for a 17-billion-euro ($23-billion) lifeline.

Malas, aiming to see off the challenge of 52-year-old former foreign minister George Lillikas to reaching a second round vote next Sunday, has argued for "softer" austerity measures.

President Demetris Christofias sought a bailout in June, and talks dragged on as the outgoing leader, who is not standing for re-election, resisted measures including privatisation and reopened talks with Russia on a top-up loan.

On the political front, the international community will also expect the next Cypriot president to pick up the pieces of a deadlocked UN push for peace.

Anastasiades supported a failed "Yes" vote for a UN reunification blueprint in 2004, even though it was overwhelmingly rejected by Greek Cypriots, resulting in a divided island joining the EU.

Cyprus, which gained independence from Britain in 1960, has been divided since 1974 when Turkish troops invaded and seized its northern third in response to an Athens-inspired coup aimed at uniting the island and Greece.

Lillikas is the only one of the three main candidates who rejects a bailout, saying it would plunge the tourist destination into spiralling recession. Instead, he wants to sell untapped offshore gas reserves in advance.

"I voted for Lillikas because I'm looking for hope. We can't wait until 2020 for the gas -- all the young people will have left the island by then," said civil servant Persa Nicolaou, 54.

A total of 11 candidates stood in the polls, including two women.