The electorate have the final say on an agreement

 “We have faith in our citizens, we believe in their judgment and therefore in their decision. All the country’s political forces should support the [bail-out] agreement. The citizens will do the same once they are fully informed,"   

German chancellor Angela Merkel and French President Nicolas Sarkozy will meet on Wednesday in a desperate bid to keep the eurozone from collapsing. The emergency conference was called following the surprise announcement by Greek Prime Minister George Papandreou that his government will hold a referendum on proposed austerity measures.

Following Papandreou's unexpected move, six senior party officials from the ruling Greek Pasok party called on the prime minister to resign.

Papandreou threw European markets into turmoil by announcing that the last minute deal signed by eurozone leaders last week would go to a public referendum, giving the electorate the final say on an agreement that would cut the country's debt by 50% but bind it to difficult economic readjustment.

“We have faith in our citizens, we believe in their judgment and therefore in their decision. All the country’s political forces should support the [bail-out] agreement. The citizens will do the same once they are fully informed," Papandreou said.

The Greek cabinet unanimously agreed to the referendum plan late on Tuesday evening. Papandreou told his ministers a poll would offer them "a clear mandate" from the people to implement austerity measures .

Throughout the unfolding crisis, deputies from the prime minister's Pasok party have defected in protest at increasingly unpopular policies, and one more left today, leaving the party with 151 seats. With 300 available seats in parliament, Papandreou now has a majority of one. More defections, which are likely, could leave him without a clear majority.