Greek Prime Minister Alexis Tsipras called a referendum on the proposed debt deal with international lenders for July 5, in a televised address in the early hours of Saturday.

A few hours before a critical Eurogroup meeting in Brussels aimed to reach a compromise reforms for cash deal on time to avert a default and Grexit in coming weeks, the Leftist leader made the surprise announcement.

"We respond to ultimatums with democracy," the Greek Leftist leader said at the end of a cabinet meeting called on Friday evening upon his arrival in Athens from marathon negotiations in the Belgian capital.

Tsipras said that his suggestion for the conduction of the referendum on whether the proposed agreement with creditors should be accepted or not was unanimously accepted by the cabinet.

The Greek premier asked for the extension of the Greek bailout program that expires on June 30 by a few days.

Tsipras said that European leaders such as German Chancellor Angela Merkel, French President Francois Hollande and European Central Bank head Mario Draghi had been informed on the referendum plan before the address.

The Greek leader said that parliament plenary will vote on Saturday on the referendum proposal.