"bank customers would pay a levy of 6.75% or 10% on their bank deposits... The EU and IMF have demanded the levy in return for a 10bn-euro ($13bn; £8.6bn) bank bailout." [1]
We don't really know which individual came up with the idea... but the EU were okay with the original plan to take money from those with <100k as part of a bailout, as long as the Cypriots got it passed locally as a "tax" to avoid any potential legal issues with the EU directive on protecting deposits.
[0] This is true even more since contrary to Greece or Ireland, there’s no indication whatsoever that Cyprus will ever pay back 10 bn €.
http://www.cyprus-mail.com/cyprus/cyprus-banks-pass-eu-stres...
Many think the bank stress tests are a joke and only exist to raise investor confidence. If true, then those people so quick to criticise Cyprus, might soon find themselves sharing the same fate.