Greek PM Papandreou Cancels Referendum, Won't Resign

A deal struck with the opposition means that Greece's parliament will likely pass a controversial bail-out package.

Update: Greek Prime Minister Papandreou has decided to cancel the referendum on the country's bailout package. He will also stay on as prime minister (earlier reports had suggested his resignation was imminent) and that he would attempt to work with the conservative opposition to keep the legislative assembly afloat for now. The opposition has also signalled that it would likely vote in favour of the bailout provisions.

It's been a devil of a week in Greece, and now it looks as though George Papandreou, the country's prime minister, will resign in the coming hours, according to BBC. Papandreou's offer of political seppuku comes as his cabinet reportedly rejected his proposal of holding a referendum on Greece's bailout package, which would pump 130 billion euros into the Greek economy, cut their debt in half, and force the government to cut back billions in services and social spending. The BBC's sources say Papandreou will step aside to make way for an interim, coalition government led by former central banker Lucas Papademos until elections are called. Papandreou had called for a confidence vote to be held tomorrow, although his Pasok party only commands 152 of 300 seats, and a handful of Pasok MPs had openly stated they would vote against their leader.