After talks with Greece's beleaguered Prime Minister George Papandreou, the visibly angry eurozone leaders insisted that if he wants to hold a referendum then he must do so as soon as possible to clear up all uncertainty.
And they warned that if Greece does not agree to meet the terms of the debt deal hammered out last week by eurozone leaders, it will not get "one more cent" from the next planned instalment of EU and IMF bail-out.
Without this eight-billion euro transfer, observers warn, Greece would face problems paying government salaries and a messy debt default within weeks.
Papandreou agreed Greece's future in the euro was at stake and said a vote could be called on December 4. He did not reveal the wording of the referendum question, but said he was sure Greek voters wanted to stay in the euro.
The Greek leader said after meeting the European leaders "that we could move the referendum as soon as possible, organise it as soon as possible, and we believe that we can have a referendum on the 4th of December."
He insisted that it was the "democratic right" of the Greeks to vote on the bailout plan - which foresees more tight austerity measures - but added: "I believe that the Greek people want to be in the eurozone."
He conceded however that the popular vote put the country's euro membership at stake: "This is a question of whether we want to remain in the eurozone. That's very clear."
Merkel and Sarkozy both said they hoped that Greece would stay on board, but warned that Athens would not get a free ride.
"The Greeks have to decide whether to continue the adventure with us or not," warned Sarkozy. "We hope to continue with the Greeks, but there are rules that have to be respected."
"The Europeans and the IMF can't release the sixth tranche of loans to Greece until Greece endorses the package of October 27," Sarkozy said, calling for the referendum "if one is needed" to be carried out swiftly.
The European leaders also pledged to stand by the euro, even if the Greeks were to vote against it.
"If the Greeks say they do not want to stay in the euro, we will accept it, but we will not abandon the euro," Merkel said.
"We do not want to let the euro be destroyed, we do not want to let Europe be destroyed," stressed Sarkozy. "The Greek people are free to choose, but we are accountable for the stability of the euro zone."
On Monday, Papandreou shocked Europe by saying he would put the terms of the bail-out deal to a popular vote, sending panic through markets which thought the rescue plan a done deal.
That news overshadowed Thursday's G20 summit, which Sarkozy had hoped could be a forum to relaunch a drive to reform global finance.
It also increased the threat posed to Italy by its own debt mountain - forcing the costs of Italian government borrowing higher.
International Monetary Fund chief Christine Lagarde said that the IMF would only decide on the next tranche of Greek aid after the referendum.
"As soon as the referendum is completed, and all uncertainty removed, I will make a recommendation to the IMF Executive Board regarding the sixth tranche of our loan to support Greece's economic program," she said in a statement.
For months the eurozone has insisted that Greece will not leave the eurozone, and the summit marked the first time the possibility of a country abandoning the euro had been so explicitly raised.
Despite hostility in Greece towards the tough rescue conditions, a recent poll indicated that most Greeks favour staying in the eurozone.
G20 members meeting from Thursday in Cannes are expected to heap further pressure on Europe.
The White House said it wanted "unanimity of purpose" to emerge from the G20. White House spokesman Jay Carney said the situation would be a key subject.
Meanwhile, China's President Hu Jintao told the French daily Le Figaro: "China sincerely wants stability for the eurozone and the euro," but without confirming that China would participate in the EU rescue fund.
Following the talks Papandreou set off back to Athens to face a confidence vote in parliament. Sarkozy will host the leaders of the world's most powerful economies at a two-day summit in Cannes starting Thursday.
- AFP/de
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