Prime Minister George Papandreou said on Thursday a referendum on Greece's bailout lifeline would be scrapped if the conservative opposition agreed to back the package in parliament.

His office denied Papandreou had spoken to news outlets on Thursday after some reports quoted him as saying he had scrapped plans for a referendum.

Papandreou, under fire at home and abroad over his shock decision to call for a referendum, told his cabinet he was ready to hold talks with the opposition and praised their support for the 130 billion-euro (111 billion pound) bailout package.

If the opposition agreed to back the deal in parliament, no referendum would have to be held, he said.

I will be glad even if we don't go to a referendum, which was never a purpose in itself. I'm glad that all this discussion has at least brought a lot of people back to their senses, he said in the text of his speech released to media.

If the opposition comes to the table to back the bailout, a referendum is not needed, said Papandreou.

He said he had conveyed that message to European leaders in Cannes on Wednesday.

Papandreou's government was on the brink of collapse on Thursday as the opposition and some government lawmakers demanded a caretaker administration to force through approval of the euro zone bailout, the nation's only financial lifeline.

The prime minister reiterated that Greece's euro zone membership was not in question and heading to elections immediately would entail a huge risk of the country going bankrupt.

(Reporting by Harry Papachristou and Renee Maltezou, writing by Deepa Babington; Editing by Robert Woodward)