Greek PM Scraps Referendum on Greek Debt Plan

"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos said, adding it "cannot depend on a referendum."

Venizelos said the country's attention should instead be focused on quickly getting a crucial €8 billion ($11 billion) installment of international bailout funds, without which it faces bankruptcy with weeks.

In Cannes, French President Nicolas Sarkozy and German Chancellor Angela Merkel met with Papandreou on Wednesday night and told him Greece would not get the latest funds from its existing bailout until after the vote. They also any referendum should be on whether Greece wants to stay in the eurozone or not, suggesting that it be held no later than Dec. 4.

Greece's new debt deal would give the country an extra €100 billion ($138 billion) in rescue loans from the rest of the eurozone and the IMF — on top of the €110 billion ($152 billion) it was granted a year ago — and would see banks forgive Athens 50 percent of the money it still owes them. The goal of the program is to reduce Greece's massive debts to the point where the country is able to handle its finances without constant bailouts.

Speaking in Cannes, Papandreou said he was forced to call the referendum after it became clear there was no "broad support" from opposition parties for the bailout deal reached with the rest of the eurozone and big banks just a week ago.

Rumors abounded Thursday about a possible Papandreou resignation, but his office denied the reports. State TV said lawmakers had sounded out former European Central Bank vice president Lucas Papademos as a possible unity government leader.

The political drama is not over. Papandreou has called a confidence vote on his government for Friday night. But Socialist lawmaker Eva Kaili said she would not vote in favor, which would mean the governing party would have the bare minimum 151 votes in the 300 member parliament, barring support from independents.

Earlier in the day, Antonis Samaras, leader of the conservatives, called for a transitional government to ratify the European debt deal and prepare for early elections.

"Under the weight of these dramatic events, we have witnessed a crisis of the ability to govern. The country must immediately return to a state of normality," Samaras said. "Under the current conditions, the new debt deal is unavoidable and must be safeguarded."

A conservative party official said a transitional government should not include members of any political party, and especially not their own. The official spoke on condition of anonymity to disclose the party's thoughts.

The two other European governments besides Greece that have received bailouts — Portugal and Ireland — have seen their governments fall during the economic turmoil.