Greek Referendum in Doubt as Allies Desert Premier

The Greek government teetered on the brink of collapse Thursday over plans for a referendum on a euro zone bailout, with ruling party defections casting grave doubt on whether Prime Minister George Papandreou can survive a confidence vote.

Even Finance Minister Evangelos Venizelos broke ranks with Papandreou, coming out against holding the referendum after a bruising meeting with the German and French leaders who made clear Greece faced ejection from the euro zone if the nation rejected the 130 billion-euro rescue.

The referendum is dead, ruling party lawmaker Nikos Salayannis said on state radio.

Another lawmaker of Papandreou's socialist party PASOK said she would not support the government in a parliamentary vote of confidence on Friday, cutting its majority for the vote to just one. Snap elections would probably follow if Papandreou's majority vanished.

PASOK was in turmoil Thursday, with one senior lawmaker calling for a government of national unity following Papandreou's shock call for the referendum, and another saying he should resign.

Venizelos, one of the most powerful men in the PASOK government, originally supported Papandreou's plan. His change of mind came after he and Papandreou attended an emergency summit in Cannes on Wednesday with German Chancellor Angela Merkel and French President Nicolas Sarkozy.

A Finance Ministry source told Reuters on condition of anonymity that Venizelos believed the vote on the bailout, agreed by euro zone leaders only last week, should not be held while immediate funding to keep Greece afloat still had to be secured.