Speaking several hours after the deal was reached in Brussels, Simos Kedikoglou said: “The agreement reached on Cyprus thισ morning is painful but the only way to stop the chaos that would bring about bankruptcy and exit from the Eurozone .”

“The most important thing now is: How will help Cyprus to stand back on its feet. Now we look ahead. Cyprus has made the ‘miracle’ many times and will do it again. And I will not let anyone advantage of the temporary weakness, ” he added.

Cyprus’ conservative government has defended a painful bailout deal with international creditors insisting it had stopped a “disorderly” default and euro exit.

Popular Bank, the island’s second largest bank, also known as Laiki, will be closed and all deposits below 100,000 euros will be shifted to the Bank of Cyprus, the island’s top lender, to create a “good bank”, according to Reuters.

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalise the Bank of Cyprus, the news agency added.

The agreement came hours before a deadline to avert a meltdown of the banking system in tense negotiations between President Nicos Anastasiades and Troika.

Without a deal, Cyprus’s banking system would have collapsed and the country could have become the first to crash out of the European single currency.

Cyprus is set to begin receiving its bailout installments in May.