Cypriot youth protest as banks stay shut

(Reuters) - Thousands of students and hundreds of bank workers protested in the Cypriot capital Nicosia on Tuesday as banks stayed shut to stop a run on deposits after the island agreed a painful bailout to avert bankruptcy.

The chairman of Cyprus's biggest commercial bank offered to resign after a special administrator was appointed over his head to run the lender, which is being restructured as part of the package to bail out the oversized financial sector.

Cyprus's banks were ordered to remain closed until Thursday, and even then will impose capital controls to prevent depositors from stripping out all their funds.

Cyprus had faced bankruptcy and potential ejection from the European single currency without a rescue deal with international lending bodies. Now that the deal has been struck, it faces job losses and economic contraction.

Reuters journalists estimated up to 3,000 high school students protested outside parliament, the first major expression of popular anger after Cyprus agreed the 10 billion euro ($13 billion) bailout with the European Union.