Markets tumble in Greek turmoil

The FTSE 100 Index fell more than two per cent after Greek prime minister George Papandreou unexpectedly announced that he would allow the Greek public to have their say on whether or not to implement the much-heralded proposals to protect Europe from economic collapse.

Mr Papandreou is facing huge domestic pressure over the deal with calls for his resignation mounting.

The package entails a decrease in Greece’s debts in exchange for increased austerity measures.

The decline in shares came just hours after official figures revealed that the pace of economic growth in the UK had accelerated faster than expected in the third quarter of 2011. GDP increased by 0.5 per cent in the three months to the end of September, up from a 0.1 per cent rise in the previous quarter, the Office for National Statistics revealed.

Despite the improved situation, Chancellor George Osborne sounded a note of caution upon the figure’s publication, saying: “Britain has a difficult journey to make from its debt-fuelled past.”

His views came just hours before the announcement from Athens.