Europe's two top economies on Monday insisted that it was Cyprus's proposal to slap a levy on all Cypriot bank savings under an EU bailout deal and appeared to suggest it review the contested plan.
France and Germany, as well as the European Central Bank (ECB) based in the German city of Frankfurt, emphasised that they were not behind the move which has caused stock markets to slump and again stoked debt crisis fears.
In the bailout accord agreed early Saturday with the EU, the International Monetary Fund and the ECB, Cyprus accepted a levy of 6.75 percent on accounts up to 100,000 euros ($129,300) and 9.9 percent thereafter.
But the move was again under discussion Monday.
An EU source in Brussels said Nicosia and international creditors were busy discussing changes to the levy, as Cyprus's parliament postponed until Tuesday a session to vote on the deal which has triggered outrage in Cyprus.
Germany said that it was up to the Cyprus government to decide how to finance the EU lifeline of about 10 billion euros, the first eurozone rescue that foresees private depositors having to help foot the bill.
"How the country makes its contribution, how it makes the payments, is up to the Cyprus government," government spokesman Steffen Seibert told a regular news briefing.
"Germany could have imagined a different plan but it is not our decision," he added.
The ECB opened the door to possible amendments to the EU bailout deal, arguing that as long as the financing was secure, it was up to the Cyprus government to decide how to raise it.
"It's the Cyprus government's adjustment programme, not the troika's or any other government's," ECB executive board Joerg Asmussen told a conference, referring to the term used for international creditors, the EU, the ECB and the International Monetary Fund.
"If Cyprus's president wants to change something in the structure of the levy on bank deposits, that's in his hands. He must simply make sure that the financing is intact," Asmussen said.
France backs shielding small-time deposit holders in Cyprus from the levy, Finance Minister Pierre Moscovici told AFP.
"If Cyprus chose a different distribution to better protect small deposits, while respecting the total amount of its contribution to the programme, we have to listen to it and, for me, to hear it," he said.
"It's the position that I defended Friday (at the meeting of eurozone finance ministers) faced with much harder positions," he added.
Meanwhile, Luxembourg Prime Minister Jean-Claude Juncker warned the EU bailout deal for Cyprus could lead to a "loss of confidence".
"I have grave concerns that this will lead to a loss of confidence, not just from the banks but also from the people," the former head of the 17-nation eurozone finance ministers group told journalists on a visit to Vienna.
Russia reacted angrily to the plan which analysts said was meant to ensure that Brussels did not spend billions propping up ill-gotten gains of Russia's super-rich that are sometimes kept in Cypriot accounts.
President Vladimir Putin slammed the proposed tax on bank deposits in Cyprus as "unfair, unprofessional and dangerous."