NICOSIA (Reuters) - Cyprus has rescinded citizenship briefly bestowed upon a Syrian billionaire suspected by the European Union of helping to bankroll President Bashar al-Assad's government, authorities said on Saturday.

Rami Makhlouf, who is a maternal cousin of Assad, is widely considered part of the Syrian president's inner circle and one of the most influential men in Syria.

Cyprus granted him citizenship in January 2011, and it was later extended to his wife and three sons. But in August 2012 the cabinet decided to withdraw citizenship for the whole family, which a legal review panel approved in March.

The decision was rubber-stamped by the Cypriot government at a cabinet meeting this week.

Cypriot daily Phileleftheros said Makhlouf did not respond to requests to appear at the review panel and sent lawyers from Syria and Paris instead.

"There are reasons of public interest for this decision," Cyprus government spokesman Christos Stylianides said, declining further comment.

Makhlouf, whose interests before the crisis ranged from banks to a mobile phone network and real estate, says he is legitimate businessman whose dealings are all above board.

But the extensive reach of his business network alienated much of the merchant community in Syria, and during the first protests in the town of Deraa in early 2011, residents burned the local branch of Syriatel, Makhlouf's mobile phone provider.

The tycoon has been under U.S. sanctions since 2008 for what Washington calls public corruption. European Union foreign ministers slapped further sanctions on him in May 2011, accusing him of bankrolling Assad.

In June 2011, he said he was quitting the Syrian business scene and becoming a philanthropist. He has since shunned the spotlight, and his current whereabouts are unknown.

Makhlouf initially petitioned Cyprus for citizenship in 2009, Phileleftheros reported. His supporting documents included real estate valued at 320,000 euros on the island, and 17.3 million euros in fixed five-year time deposits in Cypriot banks, it said.

(Reporting by Michele Kambas; Editing by Sonya Hepinstall)