Greek leader calls off referendum on bailout plan

ATHENS: In a tumultuous day of political gamesmanship, Prime Minister George A. Papandreou called off a referendum on Greece’s new debt deal with the euro zone on Thursday after winning a measure of support from his opposition and managing to repair, at least for a day, a major rupture in relations with Europe.

The decision to abandon his idea of holding a popular vote on the European debt deal did not end the political turmoil here; Mr. Papandreou still faces a rebellion in his own Socialist Party and the fury of some opposition figures, and he will have to weather a difficult confidence vote on Friday. But talk of a possible unity government eased international fears of immediate new elections and a looming default if he did not survive in office, cheering markets in Europe and abroad.

In an address to his party’s central committee on Thursday evening, Mr. Papandreou said there was no need for a referendum now that the opposition New Democracy Party had said for the first time that it would back the agreement, reached last week, to write down Greek debt in exchange for austerity measures and a commitment to the euro as the nation’s currency.

The prime minister invited the New Democracy Party to become “co-negotiators” on the deal and later said that talks on a unity government should begin immediately. He also suggested that he would be willing to step aside so that others could form a unity government if he won Friday’s confidence vote. “I am not clinging to my seat,” he said.

At first, Mr. Papandreou was said to have offered to resign before the confidence vote on Friday. By late afternoon, however, the Greek news media reported during the cabinet meeting that he not only was refusing to resign but was in fact calling off the referendum.