The Greek Prime Minister George Papandreou has called a referendum on a new EU aid package to ask voters whether they want it or not.
A “no” vote could throw the question of the country’s solvency up in the air again, raising more serious questions for the euro zone.
The prime minister said a referendum was the “highest form of democracy” and would allow the people to decide.
He also said a vote of no-confidence would be held, but ruled out elections. No date was set but the referendum should take place in the next few weeks.
MPs applauded but euro zone leaders may be less approving. Last week they agreed to a second bailout rescue loan of 130 billion euros for Greece as well as a 50 per cent write-down on its debt.
But as protest after protest has shown, many people vociferously oppose more austerity.
An opinion poll suggests nearly 60 per cent of Greeks disapprove of the agreement at last week’s EU summit, with many fearing a total loss of sovereignty.