ATHENS (Reuters) - Greek banks will be closed for a week until July 6 with limits set on withdrawals from cash machines, a government official said on Monday as capital controls aimed at protecting the country's crippled financial system took effect.

Speaking after a cabinet meeting to approve the measures, the official said cash machines would be closed at the start of Monday but would be reopened late in the afternoon. Daily withdrawal limits would be set at 60 euros, the official said.

Under the measures, imposed to check a flood of withdrawals from Greece's shattered banking system, online transactions would be allowed within Greece but foreign transfers will be prohibited, the official said.

(Reporting by Lefteris Papadimas)