NICOSIA: Cypriots trickled in under bright, spring-like sunshine to vote on Sunday in a left-right presidential runoff for electing a new leader to seal a crucial bailout for the EU state on the brink of bankruptcy.

The vote, being closely watched in European Union capitals, pits rightwing opposition leader Nicos Anastasiades against Stavros Malas, who is backed by the communist party Akel in power during the island's economic downturn.

"Cyprus is at a crossroad. The people of Cyprus are today exercising their democratic right to determine the direction our country will take and in essence their own future," clear frontrunner Anastasiades said after voting in the port city of Limassol amid cheers from a group of supporters.

"I am absolutely confident that as of tonight Cyprus will have a new direction. Today's vote marks a new era for Cyprus," he said, as residents headed to the beaches to enjoy the unseasonably warm weather.

Anastasiades, 66, favours a swift EU bailout agreement for the island and says he accepts the harsh measures required to secure it, while Malas has campaigned on a pro-bailout but anti-austerity ticket.

"I voted for Anastasiades because I believe only he can take Cyprus to its previous glory," Thomas, a cafe owner in downtown Nicosia, told AFP.

Malas, stigmatised for holding a ministerial portfolio in the outgoing administration, says the Mediterranean island can defuse its economic crisis "by returning to the road of growth".

On Sunday he urged people to get out and vote.

"Today, the Cypriot people will record their final verdict and open a new chapter in the history of the republic," he said as he cast his ballot in Nicosia.

"The next government faces major challenges so we must move collectively and make wise choices. Cyprus is above all, not about personal or partisan interests."

Despite the sunny weather, voter turnout was below last Sunday's figure at the half-way stage, with official figures showing a 36.9 percent turnout by noon (1000 GMT) compared to 38.9 percent in the first round.

Analysts believe a lower turnout would favour Anastasiades who only needs another five percentage points on his previous showing.

Anastasiades took 45.46 percent of the vote in a first round on February 17, well ahead of the 26.91 percent polled by Malas, but short of the 50 percent required to secure an outright victory.

The vote comes against a backdrop of grim economic news, with the European Commission predicting the Cyprus economy will shrink 3.5 percent in 2013 after a 2.3 percent contraction last year.

It said the economy would continue to shrink until 2016.

The election is seen as one of the most important since independence from Britain in 1960, and unlike previous polls on the normally affluent island it has focused on the economy rather than reunification efforts.

If Anastasiades, who has close ties with Germany's Chancellor Angela Merkel, is elected, "there are chances of a good climate and understanding between Nicosia and Brussels," said political analyst Christopheros Christophorou.

Eurozone finance ministers have deferred a decision on the terms for an estimated 17-billion-euro ($23-billion) bailout package until after the election.

The international community will also expect the next Greek Cypriot leader to pick up the pieces of a deadlocked UN push for reconciling both sides of the island.

Cyprus has been divided since 1974 when Turkish troops invaded and seized its northern third in response to an Athens-inspired coup aimed at uniting the island with Greece.