The head of Cyprus's influential Orthodox Church says he will put the church's assets at the country's disposal to help pull it out of a financial crisis, after politicians rejected a plan to seize up to 10% of people's bank deposits to secure an international bailout.

Speaking after meeting president Nicos Anastasiades today, Archbishop Chrysostomos II said the church was willing to mortgage its assets to invest in government bonds.

The church has considerable wealth, including property, stakes in a bank and a brewery. Yesterday's rejection of the deposit tax has left the future of the country's international bailout in question.

Cyprus needs 15.8 billion euros to bail out its banks and shore up government finances to avoid default and a potential exit from the European single currency.

The Cypriot parliament yesterday rejected a critical draft Bill that would have seized part of people's bank deposits, with 36 votes against, 19 abstentions and no votes in favour. One deputy was absent.

Hundreds of protesters outside parliament cheered in jubilation and sang the national anthem when they heard the Bill had not passed.

Cyprus will now have to come up with an alternative plan to raise the money.

If it does not do so, it will not qualify for external rescue loans, the country's banks face collapse and the country could go bankrupt.

Government spokesman Christos Stylianides said a meeting was under way at the central bank in Nicosia to discuss an alternative proposal for raising funds, and for reducing the 5.8 billion euros that must be found domestically.

Bank deputy governor Spyros Stavrinakis said no decision had been taken on when banks, which have been shut since the weekend, would reopen.

The new plan being worked on has not yet been presented to the EU and International Monetary Fund, he said.