Ignoring increasing calls to step down,
Greece's prime minister announced on Thursday he would seek emergency talks with the opposition conservatives after they agreed to back the latest European bailout for Greece.
Prime Minister George Papandreou, speaking at an emergency Cabinet meeting, warned that an early election was too dangerous because it would force Greece into leaving the 17-nation
euro currency .
Papandreou sparked a continent wide crisis Monday when he announced he would put the latest European deal to cut Greece's massive debts - an accord that took months of negotiations - to a referendum.
The idea horrified other EU nations and Greece's creditors, triggering turmoil in financial markets as investors fretted over the prospect of Greece being forced into a disorderly default.
Two officials close to Papandreou said on Thursday the referendum idea has now been scrapped, after the debt deal won some support from the opposition.
"Elections as a solution, today and at this moment, would mean a much greater danger of bankruptcy and of course exit from the euro," the prime minister declared in the meeting.
"I will talk to (opposition leader) Mr. Samaras so that we can examine the next steps, based on a wider consensus."
He declared that he was pleased "because even if there is no referendum" he was glad that all the discussion "has at least brought many people toward a rational view" of Greece's dire economic situation.
The drama on Thursday in Greece sent immediate ripples throughout Europe. Premier Silvio Berlusconi's government in Italy was teetering as well after it failed to come up with a credible plan to deal with its dangerously high debts, and Portugal demanded more flexible terms for its own bailout.
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