Cyprus flatly rejected on Thursday a statement by German Finance Minister Wolfgang Schaeuble that there had not yet been any concrete negotiations with the eastern Mediterranean island's government on a bailout request.

Schaeuble was reported as saying after a Eurogroup finance ministers video conference on Wednesday that he did not expect negotiations to commence until 2013.

Cyprus Finance Minister Vassos Shiarly said on Thursday that negotiations with the troika technocrats from the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) are proceeding in a satisfactory way.

"Thus, Schaeuble's statement does not stand to reason," Shiarly said.

"Schaeuble is a wise man and I am surprised by his statement. It is possible that he may have been misunderstood and misquoted," added Shiarly, who had taken part in Eurozone finance ministers teleconference.

He said Cyprus's request for financial help to recapitalize its banks, after heavy losses resulting from the "haircut" of the Greek debt was discussed only briefly during the video conference, which mainly dealt with Greece.

Shiarly also said that the German finance minister may have meant that there is still a considerable way to go until a deal is finalized.

"For an agreement to become final it has to go before national parliaments and this may take until January," Shiarly said.

Cyprus is racing against time to clinch a bailout agreement to be endorsed by a Eurogroup finance minister's meeting on Nov. 12, as the government may not be able to meet December's payroll.

However, Shiarly said there is still another Eurogroup meeting on December 18 to consider a bailout agreement.

Separately, government spokesman Stefanos Stefanou said a troika visit in Cyprus is expected sometime next week, though not exact date has been fixed.

"We have been, for some time now, in touch and in consultations with EU institutional bodies and the troika and we are waiting for the specification of a date when the troika will come to Cyprus to conclude an agreement," Stefanou said.

State television quoted a source in New York as saying that there has been considerable progress in the negotiations with the Cyprus government over the past few days.

"Having said that, there still remain a few open issues, but a lot less than what they were last week", the source was quoted as saying.

One of the main issues on which the two sides disagree is the amount of money needed to recapitalize Cyprus's two largest banks.

Cyprus says that it will need only 6 billion euros to raise the core tier 1 capital of the two banks to the level required by ECB, but the troika negotiators insist on 12 billion euros. Endi

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