Greece will hold a referendum on the debt deal agreed last week by European leaders – a move that puts in jeopardy the wide-ranging package that took months to hammer out.
The Prime Minister, George Papandreou, announced that he would seek wider political support for the reforms required by the deal, which critics saw as a blow to Greece's sovereignty.
"This will be the referendum: the citizens will be called upon to say a big Yes or a big No to the new loan arrangement," Mr Papandreou told Socialist members of parliament.
"This is a supreme act of democracy and of patriotism for the people to make their own decision ... We have a duty to promote the role and the responsibility of the citizen."
Mr Papandreou will also ask for a vote of confidence. This is expected to be held on Friday while the referendum, the country's first in 37 years, is slated for early next year.
Greece has been rocked by months of sit-ins, strikes and violent protests over a series of austerity measures that are sending the country into a fourth year of recession in 2012.
Last Thursday eurozone leaders agreed a second, €130bn bailout as well as a 50 per cent write-down on Greece's enormous debt.
A poll on Saturday revealed that most Greeks have responded negatively towards the agreement, suggesting the possibility that eurozone leaders may have to go back to the drawing board.
The survey published by the newspaper To Vima and conducted immediately after Thursday's summit, showed that nearly 60 per cent of Greeks viewed the deal as negative or probably negative.
Mr Papandreou's own MPs have put pressure on him to share the political burden of austerity measures with other parties.
Finance Minister Evangelos Venizelos, a constitutional law professor, said the referendum was called after opposition parties repeatedly failed to side with the government in negotiations between Greece and other eurozone members.
"Greece is living through a drama, from which it must be released by asking the people to express its will," Mr Venizelos told parliament.
"Each citizen will make his own decision, with responsibility, in a process that will provide a national sense of relief and recovery," he added.
Opposition parties accused ministers of calling the vote to save their teetering government, threatened by growing dissent from Socialist dissenters.
"The Prime Minister is trying to buy time," said Costas Gioulekas of the conservative New Democracy party. "We want clear solutions. And a clear solution is obvious: elections."Reuse content