Cyprus and Russia were in urgent talks over a possible financial rescue Thursday as the European Central Bank said it would not assist the crippled Mediterranean island unless some form of bailout plan was in place by Monday.
Banks have been ordered to stay closed until next Tuesday and Cyprus is considering some form of capital controls to prevent a run on banks if they re-open.
Cyprus has previously received $3 billion in loans from Russia, which is one of the island’s biggest foreign investors.
A deal in Moscow might include Russian access to Cypriot natural gas resources and its crippled banking industry, finance minister Michael Sarris told reporters there.
"There's a lot of teams now working on a number of issues. Banks, natural gas, are there opportunities (on which) we can base some cooperation and some support from Russia," he said, according to Reuters.
"We've asked for help clearly, but something that would make also economic sense for Russia."
Sarris was holding a second day of talks with Russian officials after the Cypriot parliament on Tuesday rejected a European Union plan for a $12.9 billion bailout in exchange for up to 10 percent of the island’s bank deposits, including citizens’ savings.
The ECB said on Thursday it had decided to allow the central bank of Cyprus to keep providing banks with emergency funding until next Monday, but it would not provide further assistance.
Cypriot President Nicos Anastasiades was meeting other party leaders Thursday morning for crisis talks, CNBC reported.
The BBC said some kind of rescue plan would have to be presented to political leaders on Thursday.
"A decision on a Cyprus rescue must be made on Thursday at the latest," Anastasiades told the official CNA news agency, the BBC said.
José Manuel Barroso, president of the European Commission, said Thursday he is concerned by the crisis in Cyprus and hopes a solution will be found.
Reuters reported that Russian state development bank VEB could become involved in a rescue package, but no immediate comment was available from VEB.
"It might be possible for part of this loan to be convertible over time to equity in Cypriot assets, such as privatized state assets and hydrocarbon rights," Jacob Nell, a Moscow-based economist, told Reuters.
Cyprus has already taken other measures to save its economy, including a proposal to nationalize retiree funds from state-run companies and conduct an emergency bond sale to help raise more than $7 billion, the New York Times reported.
On Wednesday, Ivan Tchakarov, chief economist at Renaissance Capital, told CNBC that Russia, which was enraged by the unexpected European deal, could step in to save Cyprus from total financial collapse.
"This situation presents a fantastic opportunity for Russia and even President Putin to take moral high ground and to extend another loan to Cyprus and to become a savior of Europe," he told CNBC in Moscow.
Reuters contributed to this report.