Greeks have stunned the European Union by voting overwhelmingly to reject the austerity terms demanded by international investors.
More than 60 per cent of the millions of who took part in today's referendum have backed the left wing Syriza government's appeals for a No vote on a bail-out package that would have seen sweeping further cuts.
Jubilant flag waving supporters of the Syriza government poured into Syntagma Square, in Athens, opposite the Greek parliament, to celebrate a famous triumph and a decisive rejection of austerity. Many of them chanted, "No, No No."
The country's left-wing Prime Minister Alexis Tsipras, who had urged people to reject the package of measures, said in a televised address: "Today we celebrate the victory of democracy, but tomorrow all together we continue and complete a national effort for exiting this crisis."
He added that voters had granted him "not a mandate against Europe, but a mandate to find a sustainable solution that will take us out of this vicious circle of austerity"
Mr Tsipras now plans to re-enter renegotiations on the terms of the European bail-out that have been on hold since he announced a referendum more than a week ago. The deadline passed last week.
His Finance minister Yanis Varoufakis said the people had sent back the "ultimatum" from the eurozone and the International Monetary Fund (IMF).
He said: "'No' is a big 'yes' to democratic Europe. It's a no to the vision of Europe an infinite cage for its people. It is a loud yes to the vision of the Eurozone as a common area of prosperity and social justice."
German Chancellor Angela Merkel and French president Francois Hollande called an emergency EU summit and will hold a meeting today in Paris to discuss the crisis.
Italian Foreign Minister Paolo Gentiloni said: "Now it is right to start trying for an agreement again. But there is no escape from the Greek labyrinth with a Europe that's weak and isn't growing."
And Belgian Finance Minister Johan Van Overtveldt insisted the door was open for talks to resume, adding: "This complicates matters."
Both Mr Tsipras and Mr Varoufakis would have been forced to quit had the voters backed Yes. Instead former Greek Prime Minister and opposition leader former Antonis Samaras, who had campaigned for Yes, resigned as leader of the centre-right New Democracy party.
Mr Varoufakis said the Greeks would now reach out to the institutions - the IMF, the European Commission, and the European Central Bank - to try to find an agreed way forward.
"With this 'no' we will try to co-operate with our partners and we will invite them one by one to see if we can find some common ground," he said.
But it leaves the country facing an uncertain future and fast running out of euros for its banks, which will remain closed today - a bank holiday - although they have not been open for a week and people have been limited to taking out 60 euros (£42) per day.
The financial markets are expected to be hit this morning when they open after the weekend.
David Cameron will meet with Chancellor George Osborne, Bank of England Governor Mark Carney and other senior officials to discuss the likely impact on the UK.
"Britain is prepared. We have the plans in place for whatever the outcome is," Mr Osborne said.
"I don't think anyone should be in any doubt - the Greek situation has an impact on the European economy which has an impact on us. We cannot be immune."
Around 50 per cent of voters took part in the poll, the first in 41 years.
In Syntagma Square, Yiannis Gkovesis, 26, holding a large Greek flag said: "We don't want austerity measures anymore, this has been happening for the last five years and it has driven so many into poverty, we simply can't take any more austerity."
The government needs a new bailout deal fast if he is to avoid a catastrophic financial crash that could send it spinning out of the single currency.
European Parliament President Martin Schulz said the drachma may have to return as a currency now, adding: "The euro will no longer be available for a means of payment."
However it was far from clear what appetite there would be among the creditors for fresh talks with trust on both sides apparently at rock bottom.
UK anti-austerity campaigners backed the vote. Patrick Harvie, co-convenor of the Scottish Greens, said: "This vote shows austerity has failed and those bearing the brunt will no longer put up with it."
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign which campaigns for nations to be debt free added: "This is a historic defeat for austerity in Europe. Despite all the scaremongering, bullying and intimidation, the people of Greece have chosen hope over fear. Now it is time for Europe's leaders to respect democracy and take responsibility for a crisis that their banks and financial institutions helped create."
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