Cyprus's Finance Minister Michalis Sarris has left Moscow empty-handed after a two-day push to secure the island a financial lifeline failed.
Analysts said the deal fell through because Russia calculated that Cyprus was too economically vulnerable to assume the risks.
But Russia's Prime Minister Dmitry Medvedev said that Moscow "has not closed the door" on possible future assistance.
"But this will only come after there is a final plan of support for Cyprus from the European countries," he said after holding talks with European commission president Jose Manuel Barroso.
Russia's officials earlier said two state energy firms had turned down deals put forward by Sarris that could help fill a nearly €6-billion shortfall left by a €10-billion bailout offer from the European Union (EU) and International Monetary Fund (IMF).
"Our investors examined this issue and showed no interest," Finance Minister Anton Siluanov said.
He added that Moscow never reviewed the possibility of a new loan fearing bankruptcy-threatened Cyprus could not withstand more debt.
"We did not examine the question of offering them a loan because the Europeans have set a debt limit that [Cyprus] should not exceed," Siluanov said.
There was no news however on a request for Russia – holder of between one third and half of all the island's bank deposits – to ease the terms of an existing €2.5-billion loan.
Sarris had originally said he would stay in Russia until a deal was reached even while the banking crisis raged back home and the government pushed ahead with a "Plan B" that could stave off a default and Cyprus's possible exclusion from the euro.
An emergency session of the Cyprus Parliament that could race through a raft of bills aimed at raising billions of euros was held off on Friday as lawmakers re-examined the crucial package's details.
It was not immediately clear if Moscow's refusal to cooperate with Nicosia had forced Parliament to look at the drafts again.
Cyprus had been expected to introduce an investment "solidarity fund" in which Russia was to have helped underwrite government bonds.
Sarris had told Cypriot television on Thursday that he was not seeking new loans from Moscow but offering it stakes in Cyprus's banks and energy deposits.
A Russian finance ministry source said Sarris's energy proposals fell short for both the state oil giant Rosneft and its natural gas counterpart Gazprom.
Uncertainties related to Turkey
"They invited us to take part in a tender for fields in which the seismic survey work has not been completed," the source told the state RIA Novosti news agency.
Some analysts have questioned the reported supply of oil and gas resting off Cyprus's southern shore. They have also noted the uncertainties related to Turkey's own claims to a share of the deposits.
"Gazprom and Rosneft were not interested in these proposals," said the source.
Moscow has been angered by the original terms of a rescue plan for Cyprus proposed by the troika of international lenders that would have slapped a levy of 9.9% on deposits of more than €20 000.
"Russia is effectively being asked to throw more good money after bad and double-up on the commitments it has already made," JPMorgan Chase analyst Alex White said in reference to Moscow's hesitance to strike a deal.
"The risk-reward trade off [for Moscow] doesn't appear to make sense," said White.
'Assets are set for a drop'
BNP Paribas's head Russian economist Julia Tsepliaeva said that Moscow was "following a pragmatic approach" despite hurt feelings over the EU-IMF decision to institute a bank levy without prior consultations with the Kremlin.
"The other thing is that providing financial assistance in return for assets is not that interesting when the assets are set for a drop in price," Tsepliaeva added.
Officials also hinted that they felt safe letting Cyprus and the European Union settle their differences on their own because they did not feel Russia's own financial system was under threat.
Russia's first deputy central bank chairperson Alexei Simanovsky stressed on Friday that he "sees no serious risks" from Cyprus's problems. – AFP