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Events in Athens continued to cause shockwaves on Thursday, with a proposed referendum on Greece's latest rescue package suddenly taken off the table.

"The referendum was never an end in itself," Greek Prime Minister George Papandreou told members of his own Socialist Party, referring to his proposal to ask the people for their approval for the latest bailout package to be agreed in Brussels.

Before the speech, the notion had surfaced that Papandreou had even agreed to the demands of the Greek opposition for a transitional government with former vice president of the European Central Bank, Lucas Papademos becoming the new prime minister. Former Greek Prime Minister Costas Simitis, whose reforms while in office earned him many admirers in Germany, was discussed as another possible contender to take the helm.

Vote of confidence

As it turned out, the Greek premier stuck to his guns on Thursday evening, remaining optimistic about his chances of winning a planned vote of confidence on Friday.

The results of that vote would be decisive in determining the future steps that Greece would take, Papandreou told the party meeting.

At the same time, Papandreou has been made aware that he is losing support from within his own ranks.

"Papandreou belongs to the past," said Socialist lawmaker Dimitris Lintzeris. Even Eva Kaili the former television presenter turned parliamentarian who was once one of the premier's closest allies - has let it be known that she no longer feels able to express confidence in him.

Since his appearance in Cannes on Wednesday, in the wake of the referendum announcement, things have become increasingly worse for the beleaguered politician.

Papandreou's Socialist party holds a narrow two-seat in parliament. Should he lose the vote, early elections must be held within 30 days.

Play in three acts

As German Chancellor Angela Merkel and French President Nicolas Sarkozy took Papandreou to task for his surprise referendum plan, many Greeks witnessed a play in three acts that they found to be unusual - and even humiliating.

First of all, Merkel and Sarkozy took it upon themselves to announce that an important decision had been made about Greece. They delivered a stern warning, saying that when the Greek people voted in a referendum on the latest bailout package, they would effectively be voting on whether or not the country wished to remain within the core of Europe.

It was only after their press conference, that Papandreou faced the cameras, and commented on relatively trivial matters. However, his frustration and disappointment at the talks was clearly visible.

Last, but by no means least, it was suggested that the eurozone group members would discuss the situation in Greece without allowing Papandreou to sit at the table.

The behavior of Merkel and Sarkozy was described as deeply offensive by Greek Education Minister Anna Diamantopoulou, a former EU commissioner, who said that written complaints should be made to Berlin and Paris. On the other hand, another former EU commissioner - Vasso Papandreou - pinned the blame on her namesake and fellow socialist.

"These images (from Cannes) were pitiful," she complained, calling for Papandreou's immediate resignation.

'Reckless gambling'

Former Finance Minister Stefanos Manos went even further. In a radio interview, the economically liberal politician described Papandreou as a reckless gambler playing with Greece's very future in the eurozone at stake.

Respected Athens journalist Alexis Papachelas went as far as to say that - although the referendum is now off the table - the date suggested for the plebiscite, in early December, could instead be used for a general election.

"An election is supposed to be held in February at the latest but I honestly cannot see Papandreou still being the prime minister by then," Papachelas told the Greek broadcaster Skai.

Author: Jannis Papadimitriou / rc
Editor: Chuck Penfold