Greek prime minister George Papandreou has called an unexpected referendum on a new EU bail-out deal for his debt-ridden country, a move that could prompt snap elections if a public angry with austerity rejects the terms.
Pressured by his own deputies to share the heavy political burden of belt-tightening with other parties, Papandreou said he needed wider political support for the fiscal measures and structural reforms required by international lenders.
"We trust citizens, we believe in their judgment, we believe in their decision," he told ruling socialist party deputies. "In a few weeks, the (EU) agreement will be a new loan contract ... we must spell out if we are accepting it or if we are rejecting it."
The news unleashed a storm of reaction from opposition parties, which accused Papandreou of looking for a way out for his embattled party by dragging Greece through a lengthy period of political instability.
There had been talk of calling a referendum because of Greece's worst financial crisis in 40 years, but the fact that citizens would be asked to accept or reject the latest bail-out deal came as a shock to many Greeks.
Euro zone leaders last week agreed a second, €130 billion bail-out for the cash-strapped country as well as a 50% write-down on its enormous debt to make it sustainable. Opinion polls show most Greeks view the deal negatively.
Papandreou said the referendum would ask Greeks if they agreed to the deal or not, and would take place in a few weeks. Finance Minister Evangelos Venizelos told Greek television it would be held most likely early next year.
Papandreou also said he would ask for a vote of confidence to secure support for his policy for the remainder of his four-year term,
which expires in 2013.
Parliamentarians questioned the referendum's legality under the constitution, which does not allow referendums on economic issues but only matters of great national importance.
The last time Greeks held a referendum was in December 1974, when they voted to abolish the monarchy shortly after the collapse of a military dictatorship.
