Cypriot politicians were locked in emergency talks with both Russia and the European Union yesterday as they scrambled to come up with a new bailout plan to save the country's faltering economy.

The critical talks came after parliament overwhelmingly rejected a controversial measure to dock the personal savings of people living in Cyprus. MORE

Peers reject Osborne shares scheme

George Osborne suffered an embarrassing rebuff last night after peers threw out his plan for employees to be able to sign away their legal rights in return for receiving shares in their companies worth as little as £2,000. The scheme was rejected by the House of Lords by 232 votes to 178.

We're your best friend, says Obama

US President Barack Obama began his three-day tour of Israel and the Palestinian Territories yesterday with a promise that Israel has "no greater friend" than the US, amid low expectations that the trip will yield any real progress in peace talks with the Palestinians. MORE

Gove fails to 'engage and excite' teachers

Michael Gove's new curriculum has come in for fresh criticism from headteachers, who claimed the Education Secretary had failed to "engage and excite" teachers. Wildlife trusts also complained pupils would no longer be taught to "care for the environment". MORE

Police raid home of IMF head Lagarde

Police raided the Paris home of Christine Lagarde, the head of the International Monetary Fund (IMF), yesterday as part of an investigation into alleged misuse of public office and "embezzlement" while she was the French Finance Minister in 2008. MORE

Davidson rearrested in new abuse inquiry

Comedian Jim Davidson has been rearrested by police in London over fresh allegations of sexual offences. The former Generation Game and Big Break host, 59, who was on bail, "vigorously denies" the allegations.

US to pull special forces out of province

US special operations forces and their Afghan counterparts will withdraw from a strategic eastern province after complaints they were involved in human rights abuses. US military officials denied the allegations, but agreed to pull commandos out of Wardak province, despite fears it could leave it more vulnerable to attacks. MORE

US paper says charter will harm free speech

Proposals to regulate the press through a Royal Charter will "chill free speech" in Britain, The New York Times has warned. The newspaper said plans to implement the recommendations of Lord Justice Leveson would do "more harm than good" and could stifle "hard-hitting investigative journalism". MORE

Rap star's marijuana will help relieve pain

A medical marijuana facility in Michigan is partnering a member of the Grammy-winning rap group Bone Thugs-N-Harmony to cultivate and distribute a new strain of the drug. It has agreed to work with Stanley "Flesh-N-Bone" Howse on "Phifty Caliber Kush", which it claims is an effective pain reliever.

Council bows down over unisex toilets

A local authority has abandoned plans to install unisex lavatories at its new offices after protests from staff. Rochdale Council moved part of its operations to the £50m premises last week, but after a string of complaints managers have agreed to put in separate male and female toilets.

Now it's the pay more get less burgers

Popular food brands are quietly making their products smaller to boost profits, researchers have found. Consumer watchdog Which? said Birds Eye beef burgers – sold at Asda, Morrisons and Tesco – now contain a quarter fewer burgers despite the price rising from £3.98 to £4.29 this year. MORE

'Chinese Girl' bought for almost £1m

Billionaire British businessman and jeweller Laurence Graff has bought the original painting of Chinese Girl for almost £1m. The artwork, which is thought to be the most reproduced print in the world, sold for £982,050 at Bonhams auction house – nearly double its estimate. Mr Graff said the picture will go on public display.

The Rats author James Herbert dies

James Herbert, the author of best-selling horror classic The Rats, has died aged 69. He passed away at his Sussex home on Tuesday. Jeremy Trevathan, his editor for 10 years, said: "His death marks the passing of one of the giants of popular fiction in the 20th-century." The Rats, which depicts London besieged by dog-sized rodents, sold 100,000 copies in just two weeks in 1974.