The government has consistently misled Canadians and is continuing to hide the true cost of the F-35 fighter jets being considered to replace the military's aging CF-18s, opposition MPs charged Friday.

"I don't see how the minister of defence [Peter MacKay] can possibly continue in his job," interim Liberal Leader Bob Rae said.

"He's basically been a sales spokesperson for Lockheed Martin, the manufacturers of the F-35, since he took office. He's denigrated and attacked every person in opposition, in the Liberal Party or elsewhere, who has ever raised concerns or questions about this."

The Conservative government says it has not made a decision on the F-35 as a replacement for Canada's CF-18 fighter jets, but it now appears to concede that alternative fighter purchase options will be considered.

The Prime Minister's Office denied a media report Thursday that the F-35 purchase was dead, calling the report "inaccurate on a number of fronts" and promising to update the House of Commons on its seven-point plan to replace the jets before the House rises for the Christmas break at the end of next week.

That plan is now expected to follow through with a real competition and statement of requirements, something that the initial process lacked. Depending on the result of the competition, Canada could follow through with the F-35 purchase, choose another aircraft instead, or buy different planes to suit different needs. A frequently mentioned alternative to the F-35 is the Boeing Super Hornet, a new version of the F-18.

A spokesman for MacKay said he is not resigning and echoed a statement by Public Works Minister Rona Ambrose from the night before.

"Rae's comments are puzzling. Despite speculation the government hasn't announced anything. Our government is continuing to move forward with our seven-point plan. The government will be providing a comprehensive public update before the House rises," Jay Paxton said.

A spokesman for Prime Minister Stephen Harper said on Twitter that MacKay would not be resigning.

"Not going to happen," Andrew MacDougall tweeted to a Liberal staffer. "Full confidence in [Peter MacKay]."

'Completely and totally untrue'

Speaking in Toronto, Rae said the government's account of the F-35 project has said "has been shown to be completely and totally untrue."

"The government has consistently misled Canadians about the true cost of this aircraft. They've misled Canadians about their degree of oversight and their readiness to deal with the situation," he said.

External reviews The Public Works secretariat now managing the purchase of replacements for Canada's aging CF-18 fleet has contracted out two reviews of the work done previously on the F-35 file. Audit firm KPMG was contracted to study the costs of the original F-35 purchase the government first announced in 2010. This report is complete and findings may be made public as soon as Wednesday. Another tender was issued in late October for a firm to study how things worked inside the military's procurement process up to last June, when the Harper government put the brakes on the original purchase and put in place its seven-point plan. That contract, expected to be awarded this month, will measure whether problems identified with the process have been addressed.

After Auditor General Michael Ferguson questioned the military's figures last April, the Harper government promised to "hit the reset button" on the entire purchase. An "options analysis" would consider the alternative fighter jets that may meet the military's needs.

Part of that process for replacing the aircraft is an audit of the F-35's costs by accounting firm KPMG. The government said Thursday it now has the report and is reviewing it.

CBC News has learned the KPMG report is based on a longer and more realistic life cycle for the next-generation stealth fighter, which would therefore also arrive with a higher price tag than previously reported. The actual cost could be as high as $40 billion.

The cost of the F-35 project was first pegged at $9 billion for 65 planes when it was announced by the government more than two years ago, but a report by the parliamentary budget officer put it at $29.3 billion over 30 years. The federal auditor general put the total cost to buy and maintain the planes at $25 billion.

Public Works took over the process for procuring a CF-18 replacement earlier this year, extending the original deadlines for its work "to get it right."

Conservative MPs defend MacKay

Opposition MPs devoted much of Friday's question period to questions about the F-35, with the Liberals focusing on whether MacKay will step down.

MacKay was in the House of Commons but didn't stand to take any questions, allowing government House leader Peter Van Loan and Ambrose's parliamentary secretary, Jacques Gourde, to respond instead.

MacKay paused briefly on his way out of the House to say there had been a lot of speculation over the past 24 hours.

"What I can tell you is we're following the seven-point plan as we have been now for some months and into next week there will be an open and transparent discussion about the next steps that are going to follow in the CF-18 replacement," MacKay said.

MacKay didn't answer when asked whether the cost would be $40 billion.

NDP defence critic Jack Harris said Prime Minister Stephen Harper should take responsibility for having appointed MacKay as minister and for the process to select new fighter jets.

'Process is in a shambles'

"The whole process is in a shambles, quite frankly," Harris told reporters outside the House.

"This is not good enough. We've got enough misleading information out there in front of the public.... They didn't do their due diligence, they didn't have an open, fair and transparent process.

"They've demonstrated their incompetence in a $40-billion-plus contract."

Harris also pointed to the long-running Conservative attacks on anyone who questioned their cost estimate of the F-35, including that of parliamentary budget officer Kevin Page, whose projected cost was confirmed by Ferguson's report.

Speaking in Spruce Grove, Alta., Friday, Ambrose said the government has the KPMG audit report, one of several expected as part of the seven-point plan.

"That's an important report because it obviously will give us the information we need as we move forward with our cost options analysis and that is a full analysis of all options available to the government to replace our aging CF-18s," she said.

"That's an important step in analyzing what the budget for the replacement of the CF-18's is and of course also making sure that we do a full analysis before we make a decision on acquiring a jet to replace the CF-18's."

The government has long maintained the F-35 was the only plane that met Canada's needs. But last week, Gen. Tom Lawson, chief of the defence staff, told MPs there are other planes with stealth capabilities.

A spokesperson for Lockheed Martin referred questions to the Department of National Defence.

"Lockheed Martin has been a partner with the Canadian Forces for more than 50 years. We continue to look forward to supporting the Canadian government as they work to provide their air force fifth-generation capability for their future security needs," the spokesperson said.