Papandreou gave no date or other details of the proposed referendum, though the interior minister, Haris Kastinidis, said it would most likely be in January.
Unveiling his referendum plan, Papandreou said: “Citizens are the source of our strength and citizens will be called on to say ‘yes’ or ‘no’ to the agreement. It is not for others to decide but the Greek people to decide … we have faith in the people. We believe in democratic participation. We are not afraid of it.
“The people will be asked whether they want to adopt [the deal] or reject [the deal]. This vote of confidence will be a foundation stone on which we will build a new structure, a new Greece.”
The Greek finance minister, Evangelos Venizelos, said the popular vote – the second to be held since democracy was restored to the country after the collapse of military rule in 1974 – would ultimately boil down to two choices. “Do Greeks want to remain in Europe, with the euro, in a country that belongs to the developed world, or do they want to return to the 60s? Do they think it is good to owe €100bn to the banks or do they not think it is good to live with such debt?”