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The Harper government and opposition parties have agreed in principle to use a panel of outside experts to referee disputes over whether secret Afghan detainee records can be made public after being shown to select MPs.

If the parties can finalize an overall deal by early afternoon Friday, they can avert an unprecedented parliamentary showdown and possible federal election. With only hours left to go, MPs still must resolve differences over the precise role and power given to this panel of arbiters.

The Bloc Québécois and the NDP had argued the final decision on whether censored documents can be revealed to Canadians should rest with MPs.

While the Conservatives have agreed to let a select group of MPs see uncensored detainee records - in keeping with a Speaker's ruling - they have been reluctant to grant parliamentarians by themselves the power to declassify secret documents.

The parties are obliged to wrap up a deal by no later than 1:30 p.m. Friday. That's the deadline set by Commons Speaker Peter Milliken, who more than two weeks ago decided in a historic ruling that Parliament has an unlimited right to demand uncensored documents on Canada's handling of Afghan detainees.

The opposition majority has threatened to vote the minority Harper government in contempt of Parliament, and Mr. Milliken is expected to pave the way for such a move if talks fail. A successful vote would probably trigger an election because, experts say, it's hard to imagine the Harper government continuing to govern after being found in contempt.

Bloc Québécois House Leader Pierre Paquette suggested the parties are still significantly divided as he emerged from morning negotiations Thursday with the Conservatives, Liberals and NDP.

"The government put other conditions on the table," Mr. Paquette told reporters. "Their position is not the same … so we are far from a solution."

Bloc Leader Gilles Duceppe later said his party is ready for "all possibilities" if talks fail. "It would be deplorable," he said.

Other parties played down the notion that the Tories brought in fresh demands Thursday or that talks had hit a snag, saying negotiations had merely progressed to more difficult issues, including the mechanics of how a panel of jurists would operate.

This includes when the panel gets called in, as well as the balance of power between MPs and the arbiters in such cases.

"We've crossed the Rubicon on the idea there's a panel and the government crossed the Rubicon on the idea that they have to show un-redacted, unfiltered documents to MPs," one MP familiar with the negotiations said.

"We're circling around how the panel gets triggered and how do the MPs relate to the panel. That's where we are, sort of," the MP added.

NDP Leader Jack Layton said he thinks Canadians want Parliament to avoid plunging the country into another federal election.

The four parties met twice for negotiations Thursday, and are scheduled to resume talks Friday morning to try to finalize a deal.

Sources said what could still sink negotiations is if the parties are unable to agree on the precise balance of power, and relationship, between MPs selected to screen the documents and the panel appointed to referee disputes over what should be made public.

The panel may give retired Supreme Court judge Frank Iacobucci a role to play in this process. He's the ex-justice hired in a controversial move by the Harper government before it was willing to let MPs read the censored documents. Mr. Iacobucci's task was to review the records and decide if any should be released.

The makeup and size of the panel is not set yet, but if it's a three-member board, this could give the government the right to appoint one adviser while leaving another to the opposition and a third to be decided by mutual agreement, MPs familiar with negotiations said.

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