Greece's prime minister has called a referendum on the new EU rescue package, as a leading economist tells Sky News a no vote would be a disaster for the eurozone. George Papandreou said if the Greek people do not want the deal that is designed to slash the country's mountain of debt by nearly a third, it will not be adopted. He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974. "This will be the referendum: the citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," he told Socialist members of parliament. "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." Mr Papandreou said he would also ask for a vote of confidence to secure support for his austerity measures policy. The announcement comes as Greece faces delicate negotiations with its eurozone peers on the details of last week's agreement and with global bankers asked to accept a 50% loss on their Greek debt holdings. Speaking on Sky's Jeff Randall Live, Nobel prize-winning economist Professor Christopher Pissarides said the deal is the only solution to solve the debt crisis. "If it's rejected, it'll be a disaster for Greece," he said. "It'll be bad enough for the European Union and the eurozone in particular, but it'll be far worse for Greece." He added that a no vote would mean Greece would have to declare bankruptcy and be removed from the eurozone - and that Mr Papandreou would have to resign. European leaders finally agreed the elements of the deal early on Thursday morning following marathon talks in Brussels. It was decided banks will have to accept a 40% write-down on any Greek debt they hold - higher than the 40% they had originally tabled. It was also agreed that the 440bn euro (£386bn) bailout fund will be increased to around 1trn euro (£876bn). Mr Papandreou's decision comes a day before the leaders of the world's 20 biggest economies are set to gather in the south of France for the G20 summit. More follows... Guess he doesnt want to get shot by own people first....think its going to hell Greek PM Calls Referendum On EU Aid Package - Yahoo!