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Stéphane Dion will not apologize to Prime Minister Stephen Harper over the Chuck Cadman affair despite the threat of a libel lawsuit, the Liberal Leader says.

Mr. Harper filed a notice of libel suit Monday against Mr. Dion, two other top members of his caucus and the party. Court documents obtained by CTV and The Globe and Mail say two articles published on the Liberal website were "devastatingly defamatory" to the Prime Minister.

The notice of libel, which also names Liberal Deputy Leader Michael Ignatieff and House Leader Ralph Goodale, takes on the Opposition for saying that Mr. Harper knew Conservative party officials attempted to bribe Mr. Cadman to vote against a Liberal budget in the spring of 2005.

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"It's going to take much more than [the]threat of [a]lawsuit from stopping us from getting to the truth," Mr. Dion told the House of Commons during yet another boisterous session of Question Period.

"Is the Prime Minister willing to change his story? Is he willing to tell the truth?" Mr. Dion demanded.

Mr. Harper responded by accusing the Liberals of using "more and more extreme accusations" to distract from their own internal problems - "going to the point last week ... of publishing on their website a series of false and unfounded allegations of criminal misconduct on my part," the Prime Minister said.

"The truth is that this will prove to be, in court, the biggest mistake the leader of the Liberal Party has ever made."

A Liberal Party statement issued Monday accused the Conservatives of using libel chill to stifle the debate that has gripped Parliament Hill since last week.

"What we are witnessing is yet another example of the Prime Minister silencing his critics and shutting down debate by threat and intimidation ... Rather than using the courts to intimidate critics, the Prime Minister should simply provide credible answers to straightforward questions."

Mr. Cadman's wife, Dona Cadman - who is also a Conservative candidate - and her daughter and son-in-law say the dying MP told them that two men representing the Conservatives approached him in the days before the vote and offered a million-dollar life insurance policy in exchange for his support in bringing down the Liberals.

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Ms. Cadman also released a statement Monday saying she asked Mr. Harper a few years ago if he had been aware of the insurance policy offer, and he flatly denied it. She attributed the offer to the "overzealous indiscretion of a couple of individuals whose identity Chuck never revealed to me."

Mr. Harper "looked me straight in the eyes and told me he had no knowledge of an insurance policy offer," Ms. Cadman said in the statement.

"I knew he was telling me the truth; I could see it in his eyes. He said, yes he'd had some discussions with two individuals about asking Chuck to rejoin the party, but he'd told them they were wasting their time trying to convince Chuck."

Ms. Cadman said in the statement she wouldn't be running for the Conservatives if she didn't trust the Prime Minister.

"Chuck liked, respected and trusted Stephen Harper. I like, respect and trust Stephen Harper," she said.

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The articles that are the subject of the lawsuit threat are headlined "Harper knew of Conservative bribery" and "Harper must come clean about allegations of Conservative Bribery."

The articles allege that Mr. Harper, when he was opposition leader, was aware that the party officials were trying to bribe Mr. Cadman in exchange for his vote - and ask whether Mr. Harper was aware that such attempts to influence an MP were criminal, according to the notice of libel.

"These statements are false and devastatingly defamatory," says Mr. Harper's libel notice. "These malicious and reckless statements impugn the reputation of the Prime Minister and meant, and were understood to mean inter alia, that the Prime Minister knew of a bribe of a Member of Parliament and was an accomplice to that bribe."

The libel notice says the articles suggest that Mr. Harper is "dishonest, unethical, immoral and lack integrity." The documents also say the articles suggest that Mr. Harper "knowingly breached the Criminal Code of Canada."

Opposition MPs said Monday it was unprecedented for a Canadian prime minister to sue the leader of the Opposition for libel over a matter before the House of Commons.

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The quotes contained in the article were originally uttered in the Commons, where statements are not legally actionable. The Tories, faced Monday with question after question about the Cadman affair, challenged opposition MPs to repeat them outside the chamber.


Conservative party spokesman Ryan Sparrow and Mr. Harper's communications director, Sandra Buckler, did not reply to questions e-mailed to them by Canadian Press Monday asking whether any Tories made the alleged life-insurance offer without Mr. Harper's knowledge.

It's unclear how the Conservatives might have obtained life insurance for Mr. Cadman, who died of cancer two months after the vote. Insurance experts say it's almost impossible to obtain a $1-million policy for a terminally ill person.

Swirling at the centre of the political maelstrom is a tape released last week suggesting Harper not only knew an "offer" was allegedly made to Cadman, but also gave it his blessing.

During the interview with author Tom Zytaruk, recorded in September 2005, Mr. Harper confirms Conservative officials made a financial appeal to Mr. Cadman.

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"The offer to Chuck was that it was only to replace financial considerations he might lose due to an election," Mr. Harper is heard saying on the scratchy recording.

Mr. Harper has yet to explain what he meant by "financial considerations."

Mr. Sparrow said Monday that two of Mr. Harper's close confidants, Doug Finley and Tom Flanagan, met with Mr. Cadman on May 19, 2005 - the day of the historic confidence vote in which the fate of Paul Martin's Liberal government rested squarely on the Independent MP's shoulders.

They offered a repayable loan for Mr. Cadman's local riding association to cover campaign expenses if he rejoined the Tories, Mr. Sparrow said.

But Mr. Cadman ultimately sided with the Liberals in the confidence vote, and kept then-prime minister Paul Martin in office for a few more months.

Mr. Sparrow wouldn't say how much of a loan Mr. Finley and Mr. Flanagan offered. Elections Canada said the maximum riding spending limit for election expenses in Surrey North during the last campaign was $73,788.30.

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Mr. Harper's lawyers are demanding the immediate retraction of the Liberal articles and their removal from the party's website as well as an apology from Mr. Dion in Parliament. They want Mr. Dion to "acknowledge that the Prime Minister has acted ethically, morally, and legally."

They also want any electronic or paper data that the Liberals may have collected that relate to the case.

None of Mr. Harper's allegations has been proven. The offending articles were still posted on the Liberal Party website at midafternoon Monday.

"The defamatory statements are egregious. The articles are not a fair and accurate report of the proceedings in the House of Commons and are not privileged," concludes the libel notice.

Further, "they were made maliciously and with a reckless disregard for the truth."

Representatives of Mr. Dion and the Liberal party were not immediately available to comment of the case.

The Cadman affair dominated the Commons Question Period last week and is expected to do so again this week.

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