"The levy on deposits below €100,000 was not the creation of the German government," Schäuble told reporters in Berlin.
"If one reached another solution we would not have the slightest problem," he added, fuelling speculation in Brussels that the decision might be reversed soon.
France is also open to a re-worked version of the Cyprus bailout deal, changing the level at which a tax is imposed on bank accounts, a source close to President Francois Hollande said on Monday.
"It is a decision that will be made among 17 [euro zone members] and the ECB but the signals we have sent at this stage are that that is okay by us," said the source, who spoke on condition of anonymity.
In Brussels, EU sources told EurActiv that changes to the bailout deal could be agreed swiftly, maybe in a conference call involving the Troika representing the EU, the International Monetary Fund and the European Central Bank.
The weekend announcement that Cyprus would impose a tax on bank accounts as part of a €10 billion bailout broke with previous practice that depositors' savings were sacrosanct and sent a shiver across the bloc, causing the euro to tumble and stock markets to dive.
Residents on the island emptied cash machines to get their funds over the weekend.
The move also unnerved depositors in the eurozone's weaker economies and investors fearing a precedent that could reignite market turmoil that the European Central Bank has calmed in recent months with its pledge to do whatever it takes to save the euro.
The Cypriot parliament now has to vote on the deal, with a rejection potentially dragging back the eurozone into crisis mode.
Ahead the vote, the Cyprus government was working on a plan to soften the blow to smaller savers, by tilting more of the tax towards those with deposits greater than €100,000 – many of them Russians, eliciting an angry reaction from President Vladimir Putin.
The government says Cyprus has no choice but to accept the bailout with the levy on deposits, or go bankrupt.
A Cypriot government source told Reuters the introduction of a tax-free threshold for smaller bank deposits was under discussion but not yet agreed.
The eurozone has indicated that changes would be acceptable as long as the return of around €6 billion is maintained.
"It is up to the government alone to decide if it wants to change the structure of the ... contribution [from] the banking sector," European Central Bank policymaker Jörg Asmussen, who was pivotal in the weekend negotiations, told reporters on the sidelines of a Berlin conference.
"The important thing is that the financial contribution of €5.8 billion remains," he said.