Stock prices tumbled across Asia Wednesday after the Greek government's call for a referendum on an austerity plan renewed fears of default.

Japanese shares were down about 2 percent in afternoon trading while Hong Kong and Seoul both were down about 1 percent.

The sell-off followed similar losses in New York and continued after the Greek cabinet said early Wednesday it has endorsed Prime Minister George Papandreou's plan to hold a referendum on the European Union debt relief deal.

Hong Kong-based analyst Francis Lun said traders are worried that if the referendum leads to a Greek default, other countries participating in the European common currency could collapse as well.

Another Hong Kong analyst, Pu Yonghao, said the European debt crisis is clouding an otherwise positive outlook for Asia's economy.

Wednesday's losses wiped out several days of solid gains since European leaders agreed last week to create a bailout fund that would help protect against a Greek failure to pay its debts. However, Greece is being asked in return to implement harsh austerity measures which are deeply unpopular with the public.

Mr. Papandreou said Tuesday that Greeks will be asked whether they want to keep using the euro currency. He said any deal must have the consent of the Greek people, and that he hopes any turmoil caused by his announcement will be temporary.

However World Bank President Robert Zoellick warned of huge problems if Greek voters reject the plan.