Greek Prime Minister George Papandreou says Greece must implement a bailout plan offered by the European Union and warned that calling early elections would be “catastrophic.”

Speaking to members of his ruling Socialist party in Athens, he asked them to “bear the pressure” of the latest developments.

Earlier Thursday, Mr. Papandreou told his Cabinet that he will drop plans for a nationwide referendum on the bailout plan. The plan contains austerity measures that are deeply unpopular among Greek citizens.

Officials say Mr. Papandreou dropped the referendum after the opposition reversed its position and said it would support the bailout deal. The prime minister said if he had the opposition's backing on the deal, there was no need to hold a referendum. He said the referendum was never an end in itself.

European leaders have warned Greece that if it does not follow the terms of the bailout package, it will get no more EU funding. Mr. Papandreou has said that Greece's future in the eurozone is at stake.

Earlier Thursday, Greek opposition leader Antonis Samaras called for the creation of a transition government to prepare for early elections, rather than allow Mr. Papandreou to hold the referendum. Lawmakers in Mr. Papandreou's own party had threatened to abandon his government over the controversial vote.

And Greek Finance Minister Evangelos Venizelos broke ranks Thursday with Mr. Papandreou over the referendum proposal, saying Greece's status in the eurozone should not be put to a popular vote.

On the street, some Greek citizens say they want the euro, but they fear future hardships.