European markets have dropped following news that Greece plans to hold a national referendum on whether to accept a European Union rescue package for its flailing economy.
The move is reported to have shocked eurozone leaders, who last week agreed to cut Greece's debts by 50% and hand over £112bn more in rescue loans.
Greek prime minister, George Papandreou said: "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."
European markets fell following the surprise announcement. The FTSE 100 opened 2.2% down, the Germany's Dax fell 3.5% and the Cac-40 in Paris fell by 3.4%.
The precise date of the poll is yet to be announced, but it is expected to be held in January.
There have been widespread protests in Greece over the austerity measures imposed on the country by its government.