ATHENS, Greece - Greek Prime Minister George Papandreou called on Sunday for a fall referendum on "changes to the political system", including to the country's constitution.

Opening a three-day parliamentary debate that will culminate in a confidence vote late on Tuesday, Papandreou blamed Greece's bloated and inefficient state sector for bringing the country to its knees and vowed to effect deep changes.

He also said the constitutional revision will make it easier to prosecute delinquent government officials.

"I ask for a vote of confidence because we are at a critical juncture ... the debt and deficits are national problems that have brought Greece into a state of (diminished sovereignty) that may have protected us from bankruptcy, but which we need to get out of," Papandreou said.

European donors and the International Monetary Fund are requiring Greece to pass austerity measures before releasing the next 12 billion euros ($17 billion) loan from a 110-billion-euros package agreed last year to keep Greece afloat until it can get its struggling economy back on track.

Papandreou told parliament Greece is also in talks for a new bailout package "roughly equal" to the first package agreed to in May 2010.

He said the original package's projection that Greece would be able to borrow from the markets in 2012 had been disproved, but said this was not the fault of his government, which had done all it was required to, passing painful measures and reducing the deficit as a percentage of GDP by 5 percent in 2010.

Instead, he blamed ratings agencies, tax havens, "derivatives speculators" and the media, which have spread panic and discouraged potential investors.

Opposition leader Antonis Samaras called for early elections and said Papandreou's referendum proposal was an evasive maneuver masking his inability to govern.

German Finance Minister Wolfgang Schaeuble has proposed a compromise Greece rescue plan to resolve a dispute with the European Central Bank (ECB), Der Spiegel magazine reports in its upcoming Monday issue.

The proposal developed by his ministry would see a beefed-up version of Europe's temporary bailout mechanism lending to Greek banks to insure they have adequate collateral with the ECB, the report said.

It would boost the effective lending capacity of the Emergency Financial Stability Facility (EFSF) to 440 billion euros ($629 billion), and see member states double the amount of guarantees they provide the fund.

Germany's share of guarantees would climb to 246 billion euros from 123 billion euros, according to the report.

Although the EFSF already has a total capacity on paper of 440 billion euros, its effective lending ability is considered much less because the funds are only generated by selling bonds to investors.

The plan to lend to Greek banks through the EFSF would compliment a second bailout for Greece for between 90 billion and 120 billion euros, Der Spiegel reported.

AP-AFP