Never intended for referendum to happen: Greek PM

Greece's Prime Minister has told Sky News that the referendum on the eurozone bailout plan will no longer go ahead - and it was never his intention for it to happen.

The surprise announcement came after an emergency cabinet meeting, in which the opposition party called for early elections and immediate approval of the bailout deal.

"The referendum was never an end in itself," George Papandreou told the cabinet according to statements released by his office. "We had a dilemma - either true assent or a referendum. I said yesterday, if the assent were there, we would not need a referendum."

Papandreou had been under pressure to stand down, as a split emerged in his government over the plans to hold a public vote on the rescue deal.

He now says he has no intention to resign, but will hold talks with the opposition over their demands for a transitional government and early elections.

However, Papandreou warned against holding elections in the near future - as this would entail a "big risk of bankruptcy".