The BBC's Gavin Hewitt in Athens says Greece had seen 24 hours of political horse trading and power struggles. moncler
Mr Papandreou's party holds a tiny majority in parliament - 152 out of 300 seats.
Last week's hard-fought EU deal to bail out debt-ridden Greece was heralded as a breakthrough.
But Mr Papandreou threw it into doubt by announcing on Monday that Greece would put the deal - which would mean crushing austerity measures - to a referendum moncler outlet online
It's been a day of political horse trading and power struggles. George Papandreou realised he was not going to be able to count on the support of his party to get this referendum through. He was facing defeat in Friday's confidence vote in parliament.
We have been talking to the prime minister's office and they say that George Papandreou has decided to scrap the referendum in the hope of holding his party together moncler online.
It is difficult to say whether he will win the vote or not - it will certainly be on a knife edge.
But we have learned that whether he wins or loses, negotiations are going to start on putting together a government of national unity Moncler outlet.