Our Brussels correspondent Bruno Waterfield reports that EU Commissioner for the single market, Michel Barnier, believes that big depositors should have taken the hit on the Cypriot "levy" on savings, according to sources close to the French EU official.

That is code from the French European Commissioner for the Russian depositors who have substantial holdings in Cypriot banks rather than the British expats whose savings are caught up in the crisis.

"Barnier would like the one-off levy to be weighted so the burden is on large depositors," said the source.

As commissioner for the single market, Mr Barnier is the watchdog over the EU's "deposit guarantee scheme", legislation which protects up to €100,000 of savings if a bank goes bust but in the Cyprus case, say sources close to him, it does not apply.

Officials are billing the Cypriot hit on savers as a "fiscal measure" rather than a bail-in, haircut or loss inflicted on depositors in order to wriggle around the EU deposit guarantee law.

The point is made that Cypriot banks are deposit based, meaning that depositors are the only people to go to for a cash raid, given that the sovereign state in Cyprus cannot underwrite its banks.

Cypriot banks account for 55 per cent of the economy, their debts run to 800 per cent of Cyprus' GDP - this is a risk unlike any other eurozone country, officials argue.

If the two main banks in Cyprus go bust then the state goes bust too, meaning depositors would lose everything anyway is the case made in Brussels.

To put in a word for him: He inherited this racket from his "communist" predecessor.