Greece's risky electoral confrontation with its creditors exploded into a cathartic street party in Athens late Sunday, as a nation that has been pushed to the brink of economic despair rejoiced at its resolve to not blink in a high-stakes stare down with Europe.

Hundreds of Greeks gathered in front of the country's parliament late Sunday to celebrate the resounding referendum rejection of a rescue package offered by Greece's eurozone creditors.

As soon as results started trickling in, the main Syntagma square filled up with Greeks of all ages—ordinary voters, union representatives, ministers and members of parliament from the ruling Syriza party.

"No, no, no" they chanted, waving Greek and Syriza flags and holding banners that read "'No', for a free country."

In the weeklong sprint since Greek Prime Minister Alexis Tsipras announced the referendum, pundits around Europe opined that Greeks would be sabotaging their own futures by voting against the bailout terms. Such fears weren't on display in euphoric central Athens late Sunday

Varvara Papadimitriou, a 46-year old mother-of-five, said she wasn't afraid of what comes next.

"It cannot get any worse than it is right now. Regardless of what happens I feel pride and dignity."

"Tsipras is the best," she added, echoing the feeling of many on Athens's main square who were shouting slogans supporting the country's prime minister.

The gathering quickly turned into a big party, with people drinking beers and dancing in circles.

After midnight, people were dancing to the tune of 'Zorba the Greek', an iconic Greek song from the film of the same name.

Although they had been forced to line up for ATMs and despite warnings from European officials that a "no" vote could send their country outside of the eurozone, the people on the streets said they thought Greece had won the game of chicken with its creditors.

"Our place in the eurozone was never and will never be at risk," saif 53-year-old Giorgos Dermitzakis.

"Nobody can turn its back to a nation," said Maria Athanasaki, a 34-year old French teacher. "A better deal is necessary—the other European people will demand it," she added.

Big cheers were heard on the news that former Greek prime minister and leader of the opposition New Democracy party Antonis Samaras had resigned.

"We want another referendum to put in jail all the Greek politicians who brought us here," said Zoe Vergaki a 31 year-old musician.

Resentment to media coverage was also prevalent among the people in the streets, who were chanting slogans against journalists.

Over the last week, many Greek private TV stations and newspapers have taken a clear position to a 'yes' vote. According to analysts, this has angered voters and strengthened the 'no' camp.

"We went to a referendum with all the TV stations and papers against us, and with the banks shut," said Dimitris Antoniades, a 50-year-old civil servant, holding a Greek flag and wearing a 'No' sticker on his T-shirt.

Write to Nektaria Stamouli at nektaria.stamouli@wsj.com and Viktoria Dendrinou at viktoria.dendrinou@wsj.com

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