Greeks voted overwhelmingly “No” yesterday in a historic bailout referendum, defying warnings from across Europe that rejecting new austerity terms for fresh financial aid would set their country on a path out of the euro.

With nearly all the votes counted, figures showed more than 60 per cent of Greeks rejected a bailout offer from creditors that was the official issue of the ballot. The figures showed the Yes vote drew about 40 per cent.

Greek Prime Minister Alexis Tsipras hailed the 'No' vote and said his government was ready to return immediately to negotiations with creditors in a bid to get shuttered banks open again.

He dismissed talk that the referendum was effectively a vote on whether Greece stays in the euro, Tsipras said the mandate that Greeks had given him was to reach a viable solution rather than clash with Europe.

People in creditor countries now expect their representatives to protect their interest and the European interest too

'With the difficult circumstances prevailing today you made a very brave choice,' Tsipras said in a televised address to Greeks. “I'm fully aware the mandate you gave me is not one of a rupture with Europe but a mandate to strengthen our negotiating position to seek a viable solution.”

Tsipras said he would ask the country's president to summon a meeting of political party leaders to brief them on the situation.

Prime Minister Joseph Muscat said the unequivocal vote could not be taken lightly since it carried consequences not only for Greece but also for people in creditor countries and for the whole of the European project.

“The Greek government has sought to protect its people’s interest using the method it deemed best. People in creditor countries now expect their representatives to protect their interest and the European interest too,” he said shortly after the result became known.

Many of Athens’ partners have warned over the past week that a ‘No’ vote would mean cutting bridges with Europe and dramatically worsen the country’s five-year-long depression.

Finance Minister Edward Scicluna echoed that view last night when he said the referendum result would prolong the stalemate that has characterised talks between Greece and its creditors for the past four months.

Greek voters reject EU’s bailout terms

The difference now, he added, would be that every day that passes will inflict more pain on the Greek people, especially if banks remain closed and capital controls stay in force. “The Greek Prime Minister will come to the Eurogroup and expect to continue talks believing he has a stronger hand but this is not what the other members want and I believe we will have more of the same,” Prof. Scicluna told Times of Malta.

‘No’ supporters wave Greek flags as they celebrate in Syntagma Square by the Parliament in Athens, Greece yesterday. Photo: Reuters

He insisted the mandate given to the Greek Prime Minister was not binding on the governments of other Eurozone countries that had to be accountable to their own electorates.

“How can I and other finance ministers turn to our people and ask them to finance a new programme for Greece with loose conditions while accepting a haircut on previous loans?”

The result will deliver a hammer blow to the European Union’s grand single currency project. Intended to be permanent and unbreakable when it was created 15 years ago, the euro zone could now be on the point of losing its first member with the risk of further unravelling to come.

“I believe such a result can be used as a strong negotiating tool so that Europeans can understand that we are not a colony,” said Nefeli Dimou, a 23-year-old student in Athens.

ECB may be reluctant to increase emergency lending to Greek banks

Greek banks, which have been closed all week and rationing withdrawals from cash machines, are expected to run out of money within days unless the European Central Bank provides a lifeline.

Finance Minister Yanis Varoufakis was due to meet top Greek bankers late yesterday and State Minister Nikos Pappas, one of Prime Minister Alexis Tsipras’s closest aides, said it was “absolutely necessary” to restore liquidity to the banking system now that the vote is over.

However the ECB may be reluctant to increase emergency lending to Greek banks after voters rejected the spending cuts and economic reforms which creditors consider essential to make Greek public finances viable, central bankers said.

First indications were that any joint European political response may take a couple of days. German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris this afternoon. The European Commission meets in Strasbourg tomorrow and will report to the European Parliament on the situation.

“EU leaders must get together immediately, even on Monday. The situation is too serious to leave to finance ministers,” said Axel Schaefer, a deputy head of the Social Democrat (SPD) group in the German parliament.

“You have to have confidence in the ability of the ECB to act. We must use all the possibilities in the EU budget to help Greece, which is still a member of the euro and the EU.”

The ‘No’ vote has left Greece and the eurozone in uncharted waters. Unable to borrow money on capital markets, Greece has one of the world’s highest levels of public debt.

The International Monetary Fund warned last week that it would need massive debt relief and €50 billion euros.

Greek officials see the IMF report as a vital support for their argument that the bailout terms as they stood would merely have driven Greece further into depression.

The Greek Prime Minister called the referendum eight days ago after rejecting the tough terms offered by international creditors as the price for releasing billions of euros in bailout funds.