As the leaders of the G20 countries prepare for emergency talks on averting a return to worldwide recession, the United Nations' International Labour Organisation (ILO) issued a grim forecast of the social effects of the continuing economic crisis. The UN agency warned that it could take until 2016 for global employment to return to the levels of three years ago - and that anger could erupt on the streets of Europe and other continents as a result.

The economic gloom was exacerbated yesterday by Greek Prime Minister George Papandreou's surprise announcement that his country would hold a referendum on the European debt deal that was struck last week. The vote could put the tortuously conceived package in jeopardy. The Greek Finance Minister, Evangelos Venizelos, said the announcement was prompted by popular discontent at the terms of the deal. If anger at the austerity forced on the country translates into a 'No' vote, European leaders who spent months haggling over the terms of the deal could be forced back to the drawing board and the terms of the deal renegotiated.

Stock markets recorded big drops amid shocked reactions in eurozone capitals to the referendum announcement. Mr Papandreou is due to meet European leaders in France on Wednesday. In a cabinet meeting lasting late into Tuesday night, Mr Papandreou told ministers the government needed the consent of the Greek people. In a statement released by his office, he said: "The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro."

Mr Papandreou also said a possible alternative of snap elections would risk Greece defaulting on its debt. The Greek government faces a crucial confidence vote in parliament on Friday. One MP from the governing Pasok party has resigned, cutting Mr Papandreou's parliamentary majority to two - and six other leading party members have called on him to resign.

Mark Lowen, BBC News, Athens, writes: There is opposition within Mr Papandreou's Pasok party to his decision to hold a referendum, even though the cabinet expressed unanimous support. So there are fears that if Friday's confidence vote does not go as planned, then potentially this government could fall even before a referendum is held.

This was an apparently personal decision to call it. What seems to be the case is Mr Papandreou wants to take the responsibility for the austerity measures away from his shoulders and put it on the shoulders of the Greek people, to say: I need the support of the Greek people to push through this austerity drive, to continue to receive bailout money.

But he is facing a massive hurdle in trying to win support for this. He is playing a very dangerous game, and so, he has now thrown Greece into a political crisis to add to its financial woes.

• Chiefs of staff at Greek National Defence, Army, Navy and Air Force get marching orders for no clear reason

• Sarkozy and Merkel call emergency meeting over referendum call

• Huge losses for French banks exposed to Greek debt

• 'More important than ever' to push ahead with bailout, says Sarkozy

• FTSE 100 falls 3.4 per cent after opening

• Germany's Dax falls and French CAC-40 plummet by more than 5 per cent

• 59 per cent of Greeks think deal is 'negative'

• 'No' vote could prompt country's exit from the Euro

• 228-year-old US brokerage MF Global goes bankrupt due to euro bonds

• Chinese warn hopes of 'red knight' riding to slay euro debt dragon are 'misplaced'

Greece's defence minister, Panos Beglitis, said last month that he wanted to select his own people for the posts because the powerful Greek military was a 'state within the state', according to The Guardian. However, no official reason has yet been given. In a frantic phone call, the leaders of the eurozone's two largest economies agreed that the Greek decision has made it more necessary than ever to push forward with plans thrashed out during last week's EU summit.

They will meet with the Greek government, the IMF and their European partners tomorrow in Cannes, ahead of a G20 summit, to advance their view and urge fellow leaders not to wobble. Chancellor Merkel's spokesman Steffen Seibert said that she and the French president 'agreed, together with their European partners, to guarantee the full and swift implementation of the summit decisions.'

He added: 'Germany and France are convinced that this agreement will enable Greece to return to sustainable growth.' A statement issued by President Sarkozy's office read: 'France and Germany are determined to ensure, with their European partners, the full implementation in the quickest time frame, the decisions adopted at the summit, which are today more important than ever.'

However, slashed Defence budgets and the war in Libya has meant there hasn't been a vessel available since the start of October. The last ship to fill the role, called the FRE, was HMS Portland but that left for war games off the coast of Scotland in October, and it is now having a rest period in Plymouth on the south coast.

Former First Sea Lord Admiral Lord Alan West said: "I would hardly say it is a luxury. If there was a terrorism incident in UK waters, this would historically be the ship sent in to deal with it. It's a big problem. If we haven't got a ship ready to do this role then it's worrying. It's a very unsatisfactory position to be in."

"You can't help thinking that they should be grateful as Europe is trying to help," said Konstanze Pilge, a 26-year old student, walking near the Brandenburg Gate in central Berlin. "Now it looks like they are going to mess things up." Papandreou dropped his bombshell on Monday evening, less than a week after European leaders agreed the outlines of a second bailout for Athens.

"It just goes to show once again what a huge mistake it was not to throw Greece out of the euro zone at the start," said Wolfgang Gerke, a banking professor and president of the Bavarian Financial Centre think tank. Europe's paymaster Germany and its partners in the euro zone were taken by surprise by the announcement.

Countries like Germany and Finland may find it difficult to defend funneling more cash to Athens over the coming months with the threat of the referendum looming. "If the Greeks say no, then it means bankruptcy. It would be a clear 'no' to the euro," said Josef Kaesmeier, chief economist at Munich-based private bank Merck Finck. "We have got to the point where we can say: if someone doesn't want to be in the club any more, they should go."

According to the British newspaper, the report was prepared for the Trident Commission, an independent cross-party initiative set up by the British American Security Information Council (BASIC). "In the case of Israel, the size of its nuclear-tipped cruise missile enabled submarine fleet is being increased and the country seems to be on course, on the back of its satellite launch rocket program, for future development of an inter-continental ballistic missile," the report said.

Israel currently has three submarines and two more being manufactured in Germany. Earlier this year, Der Spiegel reported that Germany had granted Israel's request to provide it with six Dolphin submarines said to be capable of carrying nuclear weapons. Dolphin submarines are manufactured in the city of Kiel in Germany. Experts estimate they are have the longest cruising range of all submarines. Some reports claim they are also able to carry and launch nuclear weapons.

Fearing an uncoordinated Israeli attack against Iran, the United States is working on several levels to pressure the UN's Security Council into imposing harsher sanctions on Iran, Yedioth Ahronoth reported Monday. A senior US State Department official said there was growing concern among Obama administration officials ahead of an IAEA report set to be published in November indicating considerable progress in Tehran's development of its military nuclear program.

The US is concerned that the report may trigger Israeli actions against the Islamic Republic which may not necessarily be in line with US interests in the region. The official said that Washington's reevaluation of an Israeli strike in Iran is based on various maneuvers Israel has performed in the past few years.

The US administration is now bent on exercising more pressure on Tehran in order to dissuade Israel from this path, the source said. Washington is therefore pressing China and Russia who are currently opposed to the publication of the IAEA report. The report may cause embarrassment to both countries who are strongly against harsher sanctions on Iran.

On Saturday, the New York Times reported that the United States plans to bolster its military presence in the Gulf after the withdrawal of its troops from Iraq. Citing unnamed officials and diplomats, the newspaper said the repositioning could include new combat forces in Kuwait able to respond to a collapse of security in Iraq or a military confrontation with Iran.

The 240-gramme (6.9-ounce) beast has tracks that are covered with dry microfibres modelled on the toe hairs of the gecko, which can famously zip up windows and along walls almost without effort. The lizard does the trick thanks to millions of ultra-fine hairs called setae, which interact with the climbing surface to create a molecular attraction known as the van der Waals force.

Described on Tuesday in the British research journal Smart Materials and Structure, the robot's tracks are studded with mushroom-shaped caps of polymer microfibres just 0.017 millimetres (0.00067 inches) wide and 0.01mm (0.0004 inches) high. By comparison, the human hair is around 0.1 mm (0.004 inches) thick. The gadget weighs 240g (eight ounces) but tests show that it could take an additional load of 110 grammes (3.14 ounces).

London's FTSE 100 index of leading shares dropped more than 2%, with markets in Germany falling, France, Spain and Italy sliding between 2.7% and 4%. Andrew Lim, banking analyst at Espirito Santo in London, said: "If Greek voters reject the unpopular bailout plan it could result in a "hard default", which could force banks to take losses of about 75% on their Greek sovereign bonds, trigger payouts on credit default swap insurance contracts, and raise the threat of a systemic risk."

"If we get a hard default in Greece, it will exacerbate the situation with Italy and Spain. It just increases the problem of Italy going down the same route, and that's the real risk. The fall in Europe followed big falls on Wall Street overnight and in Asia, with surveys showing China's manufacturing remained sluggish also weighing on sentiment.

Something can't be right when the modest city of Larisa, capital of the agricultural region of Thessaly with 250,000 inhabitants, has more Porsches per head of the population than New York or London. Perhaps the penny - or the euro - is already dropping, because Professor Polemarchakis writes that Larissa "is the talk of the town in Stuttgart, the cradle of the German automobile industry, and, particularly, in the Porsche headquarters there", since it "tops the list, world-wide, for the per-capita ownership of Porsche Cayennes".

"The proliferation of Cayennes is a curiosity, given that farming is not a flourishing sector in Greece, where agricultural output generates a mere 3.2 per cent of Gross National Product (GNP) in 2009 - down from 6.65 per cent in 2000 - and transfers and subsidies from the European Commission provide roughly half of the nation's agricultural income.

"A couple of years ago, there were more Cayennes circulating in Greece than individuals who declared and paid taxes on an annual income of more than 50,000 euros."

Hard to believe? Don't take my word for it. The report in Athens News will add to fears, expressed by leading economist George Soros and others, that last week's deal to save the euro can only buy a little time - not a permanent solution. China may also question why it should support economies that pay their unemployed more than most of its workers earn.

Papandreou, whose ruling Socialist party has suffered several defections as it pushes waves of austerity measures through parliament while protesters rally outside, said he needed wider political backing for the fiscal measures and structural reforms demanded by international lenders. A leader in German Chancellor Angela Merkel's center-right coalition said on Tuesday he was "irritated" by Papandreou's announcement.

"This sounds to me like someone is trying to wriggle out of what was agreed - a strange thing to do," said Rainer Bruederle, parliamentary floor leader for the Free Democrats. "One can only do one thing: make the preparations for the eventuality that there is a state insolvency in Greece and if it doesn't fulfill the agreements, then the point will have been reached where the money is turned off." Analysts said the latest opinion poll showed a majority of Greeks took a negative view of the bailout deal.

The renewed uncertainty will be likely be an embarrassment for G20 leaders in France this week trying to coax China into throwing the euro zone a financial lifeline. "If there was to be a referendum, we may reasonably conclude that they may not accept the austerity measures. We may conclude that it will bring the pack of cards tumbling down," Howard Wheeldon, senior strategist at BGC Partners in London, said.

Officers in riot gear moved into a park late in the day where protesters were attempting to establish an encampment, hauling off demonstrators just hours after a standoff at the Capitol steps degenerated into a fight that ended in a cloud of Mace and pepper spray.

Denver police spokesman Matt Murray said 15 people were arrested in the evening confrontation, where authorities were moving to prevent protesters from setting up tents in the park, which are illegal. Officals say the demonstrators had been warned several times that the tents would not be allowed and those who attempted to stop police from dismantling the camp gear were arrested. Protesters have been staying in the park for weeks, but tents have repeatedly been removed.

Murray said that most of the protesters were peaceful but there was "just a die-hard group that didn't want to cooperate. We showed great restraint," he said. "We were calm. We went in and did what we had to do. There's a group of very committed people who believe in a cause, and then there are a few people who just want to cause trouble."

Chantrell Smiley, 21, of Denver, said she has been protesting downtown for more than a week, sleeping on the ground in the park. "It was just chaos. This wasn't necessary. My friend got hit with rubber bullets in the face. He was screaming and bleeding, then they Maced him. We're being peaceful. We don't want to be harmed. They came through and took everything down - our food, our blankets, everything's gone." Mike Korzen, 25, told the Denver Post that he was among the group that police dispersed with rubber bullets and pepper spray and suggested that the police force was excessive.

The ILO also noted that in 45 of the 118 countries it examined, the risk of social unrest was rising. Separately, the OECD research body said G20 leaders meeting in Cannes this week need to take "bold decisions".

The Organisation for Economic Co-operation and Development said the rescue plan announced by EU leaders on 26 October had been an important first step, but the measures must be implemented "promptly and forcefully". The OECD's message to world leaders came as it predicted a sharp slowdown in growth in the eurozone and warned that some countries in the 17-nation bloc were likely to face negative growth.

"We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment," said Raymond Torres from the ILO. The group also measured levels of discontent over the lack of jobs and anger over perceptions that the burden of the crisis was not being fairly shared. It said scores of countries faced the possibility of social unrest, particularly those in the EU and the Arab region.

Khaled's offer comes days after the prominent Saudi cleric, Awad al-Qarni, put $100,000 on the head of every Israeli soldier. Al-Qarni's statement - posted on Facebook - was severely criticized, and messages posted online even warned of death threats. Khaled told the broadcaster: "My offer also comes in response to the threats made against Sheikh al-Qarni."

The Saudi offers follow the recent deal between the Israeli government and Hamas, when Israel agreed to release 1,027 Palestinian prisoners in exchange for Gilad Shalit.

He added that inflation in the region was likely to be "very low" for the next 10 years. Mr Trichet steps down on Monday after eight years as head of the ECB. He will be replaced by the Italian Mario Draghi.

Last Wednesday night, leaders agreed a strategy to tackle the debt crisis and prevent it from spreading to larger economies such as Italy and Spain, although they admitted that more work needed to be done. The three main components of the strategy were: banks holding Greek debt would accept a 50% loss, the eurozone bailout fund would be boosted and banks would have to raise more capital to guard against future losses.

Leaders have been heavily criticised for not acting swiftly enough to solve the crisis, and Mr Trichet urged them to implement the measures agreed without delay. "Swift and full implementation of those decisions is now absolutely critical - now is the time for action," he said.