The plan for Greece, demanded by the European Union and the International Monetary Fund, includes 28.35 billion euros ($40.2 billion) of fiscal measures.
General sentiment has improved for the meantime, which has led to a rally in financials and commodities, Atif Latif, director of trading at Guardian Stockbrokers, said.
On the threat of debt contagion in other euro zone peripheral countries, Latif said: There may be some comfort that help will be available should it be required. This is not a situation that we would want to face, but it is unfortunately an issue on the horizon.
Investors, for now, pushed concerns over other hurdles facing Europe to one side, and took the opportunity to celebrate the news from Greece by tucking into riskier assets.
Miners and integrated oils gained along with copper prices and Brent crude.
Banks rose, while interdealer broker ICAP added 9.7 percent. Keith Baird, analyst at Oriel, cited improving sentiment for recently beaten-down financial stocks as optimism gathered pace surrounding the Greek vote.
The FTSE 100 index closed up 89.07 points, or 1.5 percent, at 5,855.95, building on Tuesday's 0.8 percent gain, having hit a fresh three-month low last Thursday.
Economic data from the U.S. also helped the rally as pending sales of existing U.S. homes bounced back from a seven-month low in May.
As the UK blue-chip index flourished on renewed optimism, rehashed bid talk swirled around ITV , up 6.6 percent.
Two traders said there was talk of a bid of 110-120 pence per share, though they gave no further details.
Sticking with M&A, embattled FTSE 250 tool and equipment maker Charter International , up 28 percent, dismissed a $2 billion preliminary approach by manufacturing buyout firm Melrose as opportunistic.
Engineers were boosted from an upbeat trading statement from Senior , the top mid-cap gainer, up 8.3 percent after saying it expects full-year results ahead of earlier estimates.
Blue-chip engineers IMI , Smiths Group , and GKN each gained 2.8 percent.
Smiths also benefited from newspaper reports that the technology and engineering conglomerate admitted for the first time that it plans to break itself up, as its chief executive told investors in New York the company would start to make disposals to create value for shareholders.
Elsewhere, mid-cap online gambling firm Bwin.party digital jumped 11.4 percent after the Alderney Gambling Control Commission suspended rival Full Tilt's European poker licences.
We estimate Full Tilt has a 10-15 percent share of the non-U.S. poker market. With a similar share themselves, we believe Bwin.party should be a prime beneficiary of any market vacuum created, UBS analyst Simon Whittington said.
Ex-dividend factors accounted for most of a short list of FTSE 100 fallers, with Compass Group , Man Group , and Tate & Lyle losing their payout attractions and knocking 1.32 points off the index.
Retailers were weak, with Marks & Spencer , Next , and Kingfisher losing up to 2 percent after a recent batch of dire news from the high street.