The Cypriot parliament has rejected a critical draft Bill that would have seized part of people's bank deposits in order to qualify for a vital international bailout.
The bill, which had been amended on Tuesday morning to shield small deposit holders from the deposit tax, was rejected with 36 votes against, 19 abstentions and zero 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.