If a referendum goes ahead in Greece, it must be a question of whether Greeks wish to remain part of the EU, said Taoiseach Enda Kenny.

Greece could not get back to the international markets and “the good and honourable name of Greece that was built up over the years is being torn down by the failure to negotiate,” he said.

During a Dáil debate on the EU council meetings, Mr Kenny said “the situation facing Greece and its people is now extremely grave. Last week we believed a solution was in sight. This week we have entered uncharted waters.”

However, he said, “the door remains open to dialogue, in a spirit of solidarity and responsibility”.

Mr Kenny earlier rejected a claim by Sinn Féin leader Gerry Adams that he "kowtows to a right-wing ideology and is shamefully uncritical and subservient to Brussels".

During Leaders’ Questions in the Dáil, Mr Adams claimed that it “does not suit the Taoiseach to have a government in Greece that proposes alternatives to the austerity politics that have increased inequality in many EU states, including Ireland”.

Mandate from people

Mr Adams said the Greek government was negotiating, but “how would the Taoiseach know? They are doing something you never did – namely trying to negotiate on behalf of the people who gave them a mandate”.

The Taoiseach “profoundly” disagreed with Mr Adams and said “I would not expect the citizens of this country would have anything to do with a situation such as that, which unfortunately obtains in Greece”.

He said: “The Greek government is entitled to call a referendum and allow the people to decide on what the question might be. Unfortunately, the deal was not on the table to be part of the referendum.”

Greek finance minister Yanis Varoufakis and other members of government had been commenting that the referendum might not be held, Mr Kenny said.

“If it is held, it must be a question of whether the citizens of Greece wish to remain part of the EU and euro zone.”

He hoped progress could be made because “nobody wants to see a situation where this spirals downwards from what is already beginning to happen in Greece”.

Socialist Party TD Paul Murphy said the Taoiseach should “withdraw the threats” if he wanted to help his Greek colleagues and show solidarity with the Greek people.

Mr Murphy said the queues at Greek ATMs were “part of the campaign of financial terror that the European establishment is pursuing against the Greek people”.

However, Mr Kenny said “there is no threat of forcing anybody out of the euro zone”. He said there was no exit mechanism and a country would have to request that it leave. Mr Murphy’s analysis was “absolutely baseless”.

“There is a way through this,” he said, “but it requires two to be at the table”.