President Nicos Anastasiades tried Saturday to appease Cypriots angry at having to pay from their bank deposits for a chunk of an EU bailout deal which his government signed to rescue the island's banks.
Faced with protest calls, the president said he will address the nation on Sunday to defend the controversial deal which he admitted was "painful" but insisted was the only way to save the banking sector from total collapse.
"Either we could choose the catastrophic scenario of a disorderly default or a painful but controlled management of the crisis that definitively ends the uncertainty and provides a starting point to kick-start the economy," he said.
He said thousands of small businesses would have gone bankrupt because of cash flow problems without the deal and the unprecedented bank levy attached for an EU bailout.
Savers in Cyprus banks reacted with shock and anger after the government agreed to the levy on bank deposits in return for a desperately needed 10-billion-euro ($13 billion) bailout.
The debt rescue package, agreed with the eurozone and International Monetary Fund after around 10 hours of talks in Brussels, is significantly less than the 17 billion euros Cyprus had initially sought.
Most of the balance is to be made up through the bank deposit levy of up to 9.9 percent -- the first eurozone bailout in which private depositors are having to help foot the bill.
The government had held out against the bailout condition, arguing it would risk a run not only on the island's own banks but also on those of other debt-ridden eurozone economies.
Opposition leader George Lillikas has called on his supporters to protest on Tuesday, charging that the president who was elected only last month had "betrayed the people's vote."
Even the conservative leader's partners in the ruling coalition had strong words against the deal.
"During our meeting it was stressed that the decision was... almost annihilating the Cypriot economy," said Marios Garoyian, after chairing a meeting of his centrist DIKO party.
"Various EU actors... (had) essentially blackmailed Cyprus with a vengeance and showed ulterior motives," Garoyian said, adding he had spoken to Anastasiades about seeking "alternative choices."
Ministers are now in a race to thrash out draft legislation ratifying the bailout and push it through parliament before banks reopen on Tuesday after a long holiday weekend, including a pre-Easter carnival marred by the news.
Anastasiades is to brief MPs at an emergency session called for Sunday from 11:30 am (0930 GMT), state news agency CNA said, with a tough ride for the draft expected at a full plenum from 4 pm (1400 GMT).
On Saturday evening, the president met party leaders and was then due to hold talks with the island's bank bosses, his office said.
The Bank of Cyprus, the island's largest lender, said it was "absolutely understandable and justified for public opinion to be concerned."
The government's acceptance of the terms prompted a flood of angry comments on the Internet, and some savers queued up at ATM machines in a desperate bid to withdraw their savings.
"This is like stealing!" said Kyriakos, an artist, at a bank ATM machine as he tried to withdraw whatever cash he could in a bid to reduce the amount he will have to pay.
The levy will see deposits of more than 100,000 euros by all residents of Cyprus hit with a 9.9 percent charge when lenders reopen their doors. Under that threshold, the levy drops to 6.75 percent.
At the same time, an additional "withholding tax" will be imposed on interest on bank deposits, and Cyprus will have to hike corporate tax to 12.5 percent from 10 percent and sell off state assets.
The vice president of the Cyprus Institute of Certified Public Accountants, Marios Skandalis, warned: "There is a very high risk that this could be the end of Cyprus as a strong and reliable financial centre."
Economist George Theocharides meanwhile estimated that around 20 billion euros in foreign deposits will be affected.
"It seems all deposits are affected and each account at each bank will be cut," Theocharides told private Sigma television.
Cyprus -- which accounts for just 0.2 percent of the combined eurozone economy -- is the fifth country to secure a debt rescue package from its eurozone partners in the three-year debt crisis.