The Greek Parliament approved on Sunday the holding of a bailout referendum on July 5, which had been proposed by Prime Minister Alexis Tsipras on Saturday.

The referendum will ask Greeks whether to accept or reject the latest terms offered by the creditors to Athens in order for the country to be granted further bailout.

MPs from the main governing party SYRIZA together with deputies from the far-right Golden Dawn party, voted in favour of the referendum.

Their colleagues from the pro-European opposition parties New Democracy, PASOK and To Potami and the Communist Party (KKE) voted against.

In total, 178 MPs voted in favour, 120 were against, while two were absent, daily Kathimerini reports.

European partners reacted negatively to the announcement of the referendum, with Eurogroup President Jeroen Dijsselbloem saying that this was a mistake for Greece.

IMF Managing Director Christine Lagarde similarly dismissed the referendum, stating that it would relate to proposals and arrangements that are no longer valid.

Lagarde, however, added a "resounding 'yes'" at the referendum would be followed by "a resounding 'let us try'", according to the BBC.

On Saturday, the finance ministers of the eurozone, rejected a request by Tsipras to extend the current bailout in order to cover the period leading up to the referendum.

The rejection means that Greece is likely to default on its debt repayment of EUR 1.5 B to the IMF, which falls due on Tuesday.

The European Central Bank is meeting on Sunday in order to discuss whether to continue its emergency lending to Greece.