Angry MPs on Tuesday rejected the terms of a bailout aimed at saving Cyprus from bankruptcy, decrying as "blackmail" a deal that had been reached with a troika of lenders that now lies in tatters.

Europe's main stock markets suffered further losses and the euro slid on Tuesday as Cyprus' international bailout appeared close to unravelling.

The speaker of the Cypriot parliament on Tuesday urged MPs to say "no to blackmail" in a vote on a eurozone bailout aimed at saving the Mediterranean island from bankruptcy.

London shares closed lower as the 10 billion euros Cyprus bailout deal appeared headed for the rocks with MPs for the president's own party saying they wouldn't vote for it.

Irish Finance Minister Michael Noonan said Tuesday the European Parliament has approved setting up a single eurozone bank supervisor which supporters say will help stop troubled banks forcing their governments to seek bailouts.

The Bank of Japan's outgoing governor on Tuesday acknowledged he failed to end the country's long-running deflation

Cyprus turned to Russia on Tuesday as President Nicos Anastasiades battled to garner support from lawmakers for a controversial eurozone bailout deal that the central bank warned was in danger of collapse.

The controversial levy on bank savings in Cyprus will not be repeated in other European countries, Eurogroup chairman Jeroen Dijsselbloem said on Tuesday, saying a unique situation had gripped Nicosia.

British finance minister George Osborne will order ministries to make a further £2.5 billion in cuts over the next two years in his budget this week, the government said Tuesday.

Europe's main stock markets dipped on Tuesday ahead of a key parliamentary vote in Cyprus on a crucial bailout deal that sent global share prices reeling the previous day.

Cyprus on Tuesday dropped a controversial levy on bank savings below 20,000 euros, sparking a warning by the central bank governor that the crucial eurozone bailout deal was now in danger of collapse.

Asian markets mostly rebounded on Tuesday while the yen fell against the dollar and euro as concerns over the eurozone abated on news Cyprus was reworking a controversial savings levy.

Athens is "ready" to absorb the subsidiaries of three Cyprus banks active in Greece, the Greek finance minister said as the eurozone sought to amend a controversial levy on the island nation's bank deposits.

Investor sentiment in Germany inched higher in March to the highest level for more than three years, with analysts convinced that the outlook for Europe's top economy remains bright, a new survey found on Tuesday.

A revised Cyprus bailout plan drops a controversial tax on bank savings below 20,000 euros but retains the levy at 6.75 percent on deposits of 20,000-100,000 euros and 9.9 percent above 100,000, according to an amended tax bill seen Tuesday by AFP.

Beijing and Washington have "enormous shared interests", China's new President Xi Jinping told the US Treasury chief on Tuesday in his first major diplomatic meeting since taking office.

The eurozone has told debt-hit Cyprus to revise a controversial levy on bank deposits to allow small savers to escape the tax, part of a larger bailout deal, amid a public outcry and fears of a bank run.

Russians are preparing to withdraw billions of euros from Cyprus and the island will plunge into a recession lasting for decades due to the onerous terms of an EU bailout, economists warned.

The eurozone told Cyprus on Monday to ditch the part of a hugely controversial 5.8-billion-euro grab on savings that stung even the smallest of account holders in exchange for a 10-billion-euro sovereign bailout deal, according to a statement issued after a conference call.

US stocks fell for a second straight day Monday as the Cyprus banking crisis sent jitters through markets.