updated 11/5/2011 2:58:26 AM ET 2011-11-05T06:58:26

Greek Prime Minister George Papandreou survived a confidence vote early Saturday, calming a vicious revolt in his Socialist party with an emotional pledge to step aside if necessary and seek a cross-party government lasting four months to safeguard a new European debt agreement.

Papandreou won the critical parliamentary confidence motion 153-145 after a week of drama in Athens that horrified Greece's European partners, spooked global markets and overshadowed the Group of 20 summit in the French resort of Cannes.

The threat of a Greek default or exit from the common euro currency has worsened the continent's debt crisis, which is already struggling under bailouts for Greece, Ireland and Portugal.

Finance Minister Evangelos Venizelos, who warned that the debt-ridden country still faced "mortal danger," said the new government would last until the end of February.

But conservative opposition leader Antonis Samaras demanded immediate elections. He did not say whether he would join coalition talks, due to be formally launched later Saturday when Papandreou meets the country's president.

"The masks have fallen," Samaras said. "Mr. Papandreou has rejected our proposals in their entirety. The responsibility he bears is huge. The only solution is elections."

Midway through its four-year term, Papandreou's government came under threat after his disastrous bid this week to hold a referendum on a major new European debt agreement. The idea was swiftly scrapped Thursday after an angry response from markets and European leaders who said any popular vote in Greece would determine whether the country would keep its cherished euro membership.

They also vowed to withhold a critical €8 billion installment of loans from an existing bailout deal that Greece needs urgently to stave off an imminent and catastrophic default.

Papandreou's shock referendum gamble, and the hostile international response, horrified many of his own party stalwarts. It prompted an open rebellion with senior socialists saying they would only back the confidence vote if he pledged to seek a cross-party coalition with a mandate to secure the new debt deal and the disbursement next bailout loan installment.

Europe's deepening crisis threatens US economy

Struggling to face down the revolt, Papandreou insisted his only priority was to save the country. He insisted he was not concerned with retaining the premiership, but warned that elections now would have been "catastrophic," jeopardizing Greece's continued bailout funding, the new debt deal and the country's euro membership.

He sought the vote of confidence "to safeguard a steady course for the country — with no power vacuum, without being dragged to election," he said.

"We must proceed in an organized way. And regardless of developments, the country must be governed tomorrow without turbulence."

Several thousands supporters of Greece's Communist Party protested outside parliament just ahead of Friday's vote to demand elections, in a rally that ended peacefully.

Government officials said they were not deterred by an initial hostile response by opposition parties to the coalition offer.

"We will keep inviting (Samaras), and re-inviting him, again and again until we have a result," Agriculture Minister Costas Skandalidis said.

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After seeing nearly two years of harsh austerity measures that spurred crippling strikes, violent demonstrations and street attacks against his lawmakers, Papandreou insisted the burden of painful reform could not be carried without help from opposition parties.

"We, the Socialist party deputies, carried the cross of reform ... But one group in Parliament is not enough," he said. "This great task requires sincere and broad support."

Greece has been surviving since May 2010 on a first €110 billion bailout. But its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase.

The new European deal, agreed on Oct. 27 after marathon negotiations, would give Greece an additional €130 billion ($179 billion) in rescue loans and bank support. It would also see banks write off 50 percent of Greek debt, worth some €100 billion ($138 billion). The goal is to reduce Greece's debts to the point where the country is able to handle its finances without relying on constant bailouts.

In return for bailout money, Greece was forced to embark on a punishing program of tax hikes and cuts in pensions and salaries that sent Papandreou's popularity plummeting and his majority in parliament whittled down from a comfortable 10 seats to just two.

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Video: Greek PM faces calls to resign

  1. Transcript of: Greek PM faces calls to resign

    ANN CURRY, co-host: Now to the financial crisis in Europe that could have huge ripple effects here at home. The prime minister of Greece is facing demands to resign as President Obama meets with world leaders in France to discuss ways to fix the world's struggling economy. We have two reports starting with NBC 's Michelle Kosinski in Athens . And, Michelle , the Greek prime minister is facing calls to resign and a crucial confidence vote in Parliament today, so what is the latest on his government 's future?

    MICHELLE KOSINSKI reporting: Well, some are calling this a Greek drama . Prime minister George Papandreou now says he would be willing to form a coalition government , but at the same time seems unwilling to resign in this strange and stunning situation. Talk of the Greek government being on the verge of collapse over this referendum issue. Now, the prime minister amid high level calls for him to resign said 'OK, that massive crucial European bailout of Greece last week under which we live under harsh austerity measures, well, I'm going to put that to a public vote,' causing other European powers to say, 'are you kidding?' If people voted no on the bailout, which they might, that would likely mean economic meltdown here. A default on huge debt, a running out of money, and Greece abandoning the euro. Have world markets been reacting to all of this? Absolutely. Could continued economic instability on this level here resonate across Europe and even into the US? Absolutely. So now the prime minister says, 'OK, OK, no referendum if all the opposition parties work together, if everybody accepts the bailout and austerity.' However, tonight at midnight he faces this confidence vote in Parliament . Everyone is hoping this will settle out by then because they're finding it hard to believe that anybody would want to shake up this government in this way during such a crucial time. Ann :

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