* Rift between Cyprus president, bank chief deepens
* Bank chief faces criticism over restructuring
* ECB warned Cyprus to leave governor alone
* Bank chief appointed by former government
NICOSIA, Oct 17 (Reuters) - Cyprus’s president said on Thursday he would press ahead in seeking the removal of the island’s central bank governor, whose handling of an international bailout last March he has sharply criticised.
President Nicos Anastasiades said he had furnished legal authorities with information backing up his claim that Panicos Demetriades is not up to the job. As an independent official, the central bank chief can be removed only with the permission of Cyprus’s highest court.
Asked if he would take the matter to court, Anastasiades told journalists: “I fully respect the constitution of our country and Eurosystem rules ... consequently there is no other route but for the legal services of the Republic to process the information and for the relevant recourse to the Supreme Court.”
The president had said in September he might ask the Supreme Court to rule on whether Demetriades could be sacked. Tensions between the two men have simmered for months.
Demetriades, a member of the Governing Council of the European Central Bank, has been accused by the president of mishandling the Mediterranean island’s bailout by international lenders in March. Cyprus had to close a major bank and seize savings held in a second in return for 10 billion euros in aid.
Appointed by the previous communist administration, the central bank chief has been criticised by the right-wing government elected in February for being slow in restructuring the banking sector. He has maintained that when he took over, less than a year before the bailout, he assumed a poorly regulated banking system which took excessive risks.
The ECB has issued warnings to the Cypriot authorities not to interfere in his work.
Asked about the dispute in Washington last weekend, ECB President Mario Draghi told a news conference: “We would have a dim view of an attempt to constrain, or to threaten, or to undermine the independence of the central bank.”
In a television interview aired late on Wednesday, Anastasiades said: “I have given a lot of evidence to the legal services, and it will decide which it will use in the petition.”
The Cypriot central bank was not immediately available for comment.
One of the main criticisms directed against Demetriades has been how, under his watch, one of the afflicted banks accumulated billions in emergency liquidity aid, only to buckle and fail when the ECB threatened to pull assistance.
Government officials have also claimed Demetriades was absent from key decision-making.
Finance Minister Harris Georgiades was scheduled to meet with Demetriades on Friday, after Anastasiades rebuffed a request for the two to meet.
“Its not an issue of bad relations, but something a lot more serious,” Georgiades told state radio. (Writing by Michele Kambas; Editing by Catherine Evans)