Cypriot deputy attorney-general under graft investigation

Attorney General Costas Clerides said an independent probe suggested his deputy, Rikkos Erotocritou, was liable to have accepted bribes in 2013.

Erotocritou strongly denies any wrongdoing and said on Tuesday the allegations were "a conspiracy".

"I will continue to perform my duties," he told reporters.

The investigative report, written by Panayiotis Kallis, a retired supreme and criminal court judge, said Erotocritou had committed criminal offences.

"The (investigator's) report is of course not binding, but it is his view," Clerides told journalists. "A criminal process, as envisaged, will move forward."

Erotocritou is alleged to have received preferential treatment in offsetting or, 'netting off' his loans against deposits held in now-defunct Laiki Bank by a large law firm which represented the lender.

Laiki was wound down and many with funds exceeding the insurable amount of 100,000 euros lost their savings in 2013, a process known as a "bail-in" under which Cyprus received 10 billion euros in aid from the European Union and International Monetary Fund.

The report alleged that in return for that alleged preferential treatment, Erotocritou initiated criminal proceedings against Russian businessmen locked in legal dispute with the law firm over administration of a property asset firm. Those charges against the Russians were subsequently dropped by Erotocritou's boss.

Erotocritou's application to balance his loan against the amount he lost in the bail-in was initially accepted by a court, but only because lawyers for the bank failed to appear. That verdict was subsequently overturned on appeal.

(Reporting By Michele Kambas)