Nicosia (AFP) - Cyprus is to hold a new vote on a privatisation bill hours before a deadline for the release of the next tranche of a 10-billion-euro bailout, after parliament rejected an initial draft.
MPs failed to adopt a first version of the controversial bill in a tied vote late Thursday which threw the bailout deal with international creditors into disarray.
But the crisis appeared to have been defused on Friday with a key party saying it would now vote in favour.
The government says it needs to pass the legislation for the sale of state utilities by Wednesday to meet the conditions set by the European Central Bank, European Commission and International Monetary Fund.
MPs will convene in emergency session on Tuesday, after the weekend and a public holiday, to debate the amended text, state radio reported.
Government spokesman Christos Stylianides said it was critical that parliament pass the legislation to avoid jeopardising the credibility of Cyprus's efforts to restore stability after the March 2013 bailout deal which was accompanied by a severe banking crisis and plunged the island into deep recession.
He said the new bill would contain amendments to reflect the concerns of the centre-right DIKO party, five of whose MPs abstained in Thursday's cliffhanger vote.
DIKO leader Nicolas Papadopoulos said his party would now back the bill after the government had agreed new provisions.
"We are delighted that the cabinet has finally accepted the most important of our amendments, which allows for the approval of the bill," he said.
Conservative President Nicos Anastasiades, who just last week was boasting of a "new economic miracle" on the island following last year's near-meltdown, stressed his resolve in a tweet.
"I am determined to keep the country on the path of stabilisation and recovery," he said.
Stylianides said the amendments would safeguard the rights of staff of the island's ports, power and telecoms utilities which are earmarked for privatisation.
Workers of all three have held strikes in the past week, drawing condemnation from employers who warned that the unions were dealing a death knell to a recession-hit economy already on its knees.
Around 200 police in riot gear kept protesters at bay during Thursday's debate after hundreds of electricity authority workers besieged parliament on Monday and scuffles broke out with police.
Staff fear there will be layoffs to make the utilities attractive to buyers, which would throw them onto the job market at a time of record unemployment.
- Tourism shines for economy -
The troika of international lenders is demanding that Cyprus raise 1.4 billion euros ($1.9 billion) through a two-year programme of privatisations.
On the political front, Anastasiades is to unveil a new cabinet line-up in mid-March after a walkout on Thursday by DIKO, his coalition partner, over resumed reunification talks with the Turkish Cypriots, his spokesman said.
All 11 cabinet ministers tendered their resignations to allow the president to carry out a wider reshuffle, but he asked them to remain at their posts until at least March 15.
On a rare bright note for the economy, official data Friday showed that Cyprus recorded an 8 percent hike in tourism revenue for 2013.
Despite annual arrivals dipping 2.4 percent to 2.4 million in 2013, tourism revenue rose to 2.08 billion euros ($2.9 billion) -? its highest for more than a decade -- from 1.92 billion euros in 2012.
Improved tourist spending has reaffirmed hopes that resurgence in the key sector will pull the economy out of recession faster than expected while also limiting the extent of the contraction.
A deep recession in Cyprus has bottomed out and the island's shell-shocked economy looks set to start growing again next year, the European Union predicts.