GREEK PRIME MINISTER George Papandreou has announced that Greece will hold a referendum on the debt deal reached with European leaders last week.

According to Reuters, the Greek people will be asked whether they want to adopt the new EU aid package or not.

“We trust citizens, we believe in their judgement, we believe in their decision,” Papandreou told members of parliament today.

This is a supreme act of democracy and of patriotism for the people to make their own decision … We have a duty to promote the role and the responsibility of the citizen.”

The deal will allow haircuts of up to 50 per cent on Greek debt and provide the troubled economy with €100 billion in rescue loans. However, a survey carried out over the weekend showed that more than half of Greece’s citizens view the bailout negatively.

No date for the referendum has been revealed but Papandreou said he would also seek a vote of confidence in parliament.

His Government holds just a three-seat majority as the country heads into a fourth year of recession.

Workers in Greece have held numerous strikes in protest over austerity measures, including increased taxes and public service pay cuts.

-Additional reporting by AP