Prime Minister Stephen Harper is trying to buy time and stave off a possible defeat by opposition parties by announcing the government will delay any confidence votes on the controversial economic update for one week.
The vote will occur Dec. 8, Mr. Harper said in the foyer of the House of Commons Friday evening.
"While we have been working on the economy, the opposition has been working on a backroom deal to take power without the consent of voters," he said.
"Stéphane Dion does not have the right to take power without an election."
The Liberals responded immediately, with MP John McCallum saying they were seeking to replace Mr. Harper's minority with a coalition government because the Conservatives failed to offer an economic stimulus package when the rest of the world had done so.
Mr. McCallum also sought to assure Canada's banking sector that a Liberal-led coaltion would not jeopardize the financial system, but rather safeguard it.
Earlier, the Liberals laid out a potential plan to bring down the Harper government by putting forward a motion they could use to defeat the Conservatives on Monday, their opposition day, and replace them with a coalition made up of themselves and the NDP.
The threat was so real that Rideau Hall said Governor-General Michaëlle Jean had made contingency plans to return to Canada from a European tour if necessary.
The Liberals presented four possible motions, one of which said the opposition "has lost confidence in this government, and is of the opinion that a viable alternative government can be formed within the present House of Commons."
The motion said the government failed to recognize the seriousness of Canada's economic situation and has not credibly presented a plan to stimulate the economy. The Liberals are also deeply angry about a proposal that would eliminate the program that provides political parties operating funds based on the number of votes they receive in federal elections.
Representatives of the Liberals, NDP and the Bloc Québécois were deep in discussions Friday aimed at cobbling together a coalition should the government be defeated.
NDP sources said party veteran Ed Broadbent held talks Thursday with former Liberal prime minister Jean Chrétien about how a coalition between their two parties could work.
This is a situation "the Tories have brought on themselves with their economic statement," Mr. Broadbent told CTV News on Friday morning. "I heard business groups this morning, they are unhappy with it. All the opposition parties are unhappy with it. So there is no question that serious discussions are going on."
By noon, however, there were indications the federal Tories had begun looking for ways to avoid a showdown.
Sources told The Globe and Mail that senior Tories have reached out to members of opposition parties in an effort to find out what compromise might be possible. It's the first sign the Tories are nervous that their economic package, which so incensed the opposition, needs to be altered in some way so as to avoid the government being toppled.
It remains by no means clear what the Tories would do to ameliorate the situation, nor what the opposition needs to drop its opposition to the package.
Nothing has been ruled out on the coalition front, one New Democrat said, contradicting reports that NDP Leader Jack Layton would not participate in a coalition government with Mr. Dion as prime minister.
That rumour must have come from the camps of one of the Liberal leadership contenders, not from the NDP, the source said, adding that every thing is on the table — including bringing in Liberal House Leader Ralph Goodale to be prime minister.
The co-operation of the Bloc would be required for any Liberal-NDP coalition to function.
