Greek PM Tsipras vows to push ahead with Sunday's bailout referendum

Greek Prime Minister Alexis Tsipras vowed yesterday to push ahead with a controversial bailout referendum despite pressure from European leaders, and urged creditors to accept a fresh reform offer by Athens.

Hours after Greece became the first advanced economy to default on the International Monetary Fund, the leftist leader used a televised address to tell Greeks to vote 'No' on Sunday to austerity demands.

European ministers were due to consider a new proposal from Athens last night but German Chancellor Angela Merkel has already insisted there can be no new deal before the referendum.

"A 'No' vote does not signify a rupture with Europe, but a return to the Europe of values," Tsipras told the nation, rebutting accusations from European Union leaders that the plebiscite was essentially a vote on whether to stay in the union.

"Come Monday, the Greek government will be at the negotiating table after the referendum, with better terms for the Greek people," he added.

Tsipras spoke hours after Merkel effectively ruled out all talks until after Sunday, saying Europe could "calmly" await the outcome of the referendum.

"The world is watching us. But the future of Europe is not at stake," Merkel told Germany's lower house of parliament.