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Stéphane Dion was forced to backtrack yesterday from a controversial comment that he would allow back into the party a senior organizer who was banned for life over sponsorship-scandal misdeeds.

Mr. Dion told the Quebec City newspaper Le Soleil that he would not object to the lifting of the ban on senior organizer Marc-Yvan Côté, who admitted he distributed $120,000 in cash to Liberal candidates during the 1997 election campaign -- money diverted from the sponsorship program.

Mr. Dion's gaffe brought back a whiff of the scandal that the Liberals had hoped was behind them. Opponents seized on the remark as evidence that the new Liberal Leader has a lax attitude toward the improprieties members of his party committed.

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The lifetime ban on Mr. Côté -- a former provincial health minister who was for years the Liberal strongman in the Quebec City area -- was perhaps too severe, Mr. Dion told the newspaper in an interview published yesterday.

"Certainly, you cannot exclude forever people who made mistakes," he was quoted as saying. "And someone who has even, I believe, recognized their error."

Yesterday, Mr. Dion backtracked, insisting that he would have no involvement in reinstating Mr. Côté and suggesting it probably will not occur.

"I am not seeking to reopen that issue and there's not an application [from Mr. Côté]as far as I know. There is a procedure we follow," Mr. Dion said, asserting that party officials would handle any such case. "I'm not recommending anything."

In 2005, former prime minister Paul Martin banned 10 people who were named in the hearings into the sponsorship scandal from membership in the party. The list also included former public works minister Alfonso Gagliano.

Yesterday, Bloc Québécois Leader Gilles Duceppe accused Mr. Dion of "coming back to the old Liberal methods that he said that he wanted to disappear" to obtain the services of an experienced organizer.

Mr. Duceppe ridiculed the notion that Mr. Côté could be forgiven when he has not said who received money from him.

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"Who are these people who received money illegally, as admitted by Mr. Côté? Mr. Dion likes clarity. He should be clear," Mr. Duceppe said at a Bloc caucus meeting in Laval, Que.

Mr. Dion's aides acknowledged privately that the leader is trying to bring the controversy to a quick end and is unhappy that his misstep could raise the spectre of the sponsorship scandal again -- noting that his leadership campaign had stressed that he was a veteran Liberal with untainted integrity.

Aides said his comments were an off-the-cuff answer to an unexpected question.

The issue caused just about every Liberal MP and senator from Quebec to scurry away from reporters. However, Montreal MP Francis Scarpaleggia, a stalwart supporter of Mr. Dion who was just appointed to the party's election readiness committee, said it is not his preference to invite Mr. Côté back.

"We're a new party and we have to go forward with new people and we are," Mr. Scarpaleggia said. "Mr. Dion is surrounded by a whole new team and there is no questioning his integrity."

While Mr. Dion didn't want to talk about Mr. Côté, he continued to express sympathy for Jean Pelletier, the long time chief of staff to former prime minister Jean Chrétien.

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The inquiry report on the sponsorship scandal laid much of the blame for lax management of the program on Mr. Pelletier.

However, in his interview, Mr. Dion called the former Quebec City mayor a "great public servant."

Mr. Martin's government fired Mr. Pelletier from his job as chairman of Via Rail in March, 2004, but a court ruled his firing violated proper legal procedure. Mr. Dion was a backbencher at the time.

"I'm very happy for him that he won in court," Mr. Dion said.

The gaffe over Mr. Côté set Mr. Dion on the defensive at the close of a two-day caucus meeting where Liberal MPs and senators plotted strategy for the coming Commons session and a potential election campaign.

At the top of the MPs' agenda yesterday was efforts to reach a joint position on an issue that divides the party: the mission of Canadian troops in Afghanistan.

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Yesterday, Mr. Dion called for public hearings in a Commons committee, and essentially established a Liberal policy to support the mission but criticize how the Conservative government is handling it.

Mr. Dion had previously suggested he will have little patience for the rising death toll and that if the mission is not dramatically changed, he will call for the troops to be withdrawn. However, yesterday he said the Liberals support the mission but will seek to make it more effective.

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