Major depositors in Cyprus's biggest bank will lose around 60% of savings over €100,000, its central bank has confirmed.

Initial signs that big depositors in Bank of Cyprus would take a hit of 30%-40% had already unnerved investors in European lenders this week.

But the official decree published today confirmed a Reuters report that the bank would give depositors shares worth just 37.5% of savings over €100,000.

The rest of such holdings might never be paid back.

The toughening of the terms sends a clear signal that the bailout means the end of Cyprus as a hub for offshore finance.

It could accelerate economic decline on the island and bring steeper job losses.

Banks reopened to relative calm on Thursday after the imposition of the first capital controls the euro has seen since it was launched a decade ago.