OTTAWA– Prime Minister Stephen Harper, teetering on the brink of defeat, has won himself a one-week reprieve in the face of extraordinary opposition efforts to form a coalition government to replace his minority Conservatives.

But opposition MPs appear unbowed by Harper's bid to delay their move to defeat his six-week-old government. Negotiations on the shape, form and leadership of the coalition government are expected to continue through the weekend.

In a stunning revolt just one week into the 40th Parliament, the three opposition parties revealed yesterday that formal talks were well underway to replace the minority Conservative government.

Late in the afternoon, an angry Harper was forced to publicly announce that he will delay until Dec. 8 any parliamentary vote that could topple his government. That includes a vote on a ways and means motion flowing from the government's fiscal update Thursday and a motion of non-confidence introduced by the Liberals yesterday, which had both been scheduled for Monday.

The opposition parties unanimously oppose Harper's provocative economic update, which contained billions of dollars in spending cuts, the suspension of the right to strike by public servants, a clampdown on pay equity and a small but significant reduction of public funding for political parties.

Harper's announcement was ostensibly made to give Canadians more time to absorb the extraordinary developments that could result in an NDP-Liberal coalition government.

It buys time for Harper to get himself out of his self-made crisis – but also allows the opposition parties time to negotiate just who will lead the "alternative" government that would be proposed to Governor General Michaëlle Jean.

One Liberal strategist said an agreement had been reached to have Liberal Leader Stéphane Dion at the helm – but that could change quickly if the Liberal leader proves a liability for a new government.

A senior Liberal added the coalition leader would not be any of the three Liberal leadership contenders – MPs Michael Ignatieff, Bob Rae and Dominic LeBlanc. The strategist also noted the Liberal caucus has not given its blessing to Dion as coalition leader and predicted the proposal could run into trouble among MPs and senators.

Dion was holed up in Stornoway yesterday and was not available for comment.

It is expected that NDP Leader Jack Layton would have a place in the new cabinet, and "various players would play different roles," an NDP official said.

The Liberals and NDP are entertaining the demands of the Bloc Québécois, which would not formally be part of a coalition, but would support it as long as Quebec's interests are met.

"We said that we won't be part of a coalition and having ministers from the Bloc; this is very clear. But we'll consider a coalition that would respect more Quebec values and interests," said Bloc leader Gilles Duceppe.

Talks between the NDP and Liberals began Thursday evening after former NDP leader Ed Broadbent and former Liberal prime minister Jean Chrétien stepped in to act as intermediaries.

Layton contacted Broadbent Thursday night to seek his counsel as a "statesman," party spokesperson Karl Belanger said, and asked him to contact Chrétien to attempt to chart a way forward.

Broadbent declined to discuss any specifics of their conversation, as did Chrétien.

"He and I both discussed what would be a good situation here for the people of Canada, for Parliament and we'll see what happens," Broadbent told reporters after a morning meeting in Layton's office.

It is clear the Conservatives were caught off guard by the vehemence of the opposition's attack on the economic update. Yesterday afternoon, Harper attempted to paint the opposition bid as an undemocratic attempt to usurp power from his newly elected government through a "backroom deal."

"The opposition has every right to defeat the government but Stéphane Dion does not have the right to take power without an election," Harper said. "Canada's government should be decided by Canadians, not backroom deals. It should be your choice, not theirs."

Harper said his party has acted "to keep cutting job-killing business taxes," accelerated construction of roads bridges and other infrastructure projects, injected "tens of billions" of liquidity into Canada's credit markets, and "acted to ensure a long term structural balance in the federal budget."

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But Liberal MP John McCallum (Markham) echoed the Liberals' complaint that the Conservative economic statement delivered on Thursday was silent on big-ticket measures to boost the flagging economy. "We in the opposition believe that the Canadian economy needs support from the government. Stephen Harper does not. That is the essential difference between us," McCallum said.

McCallum said a new government would roll out a stimulus package that was "a whole lot faster and a whole lot bigger than anything they would provide."

He even tried to reassure investors jittery about a possible change in the country's leadership.

"I want the business community and the financial community to know that should we form the government, the stability of our financial system and of our economy will be uppermost in our mind every step of the way," McCallum said.

Many Conservatives had been gleeful about the "poison pill" item in the update: the plan to slash $30 million in taxpayer subsidies for political parties. But as the political fallout takes hold, Harper's move is widely seen as a terrible political miscalculation.

A Conservative government source said yesterday the idea was Harper's.

Sources said "most" of the Conservative caucus is perplexed why the government moved to put such controversial measures in now. "It makes no sense," said one.

"To date, Harper has been a master at dividing and conquering his opponents," said Conservative author Bob Plamondon.

"But by moving to end the subsidy to all political parties, he has given the three opposition parties unity and purpose. It is a rare strategic blunder for Harper and a miscalculation not seen since (former PC prime minister Joe) Clark toppled himself in 1979."

Conservative insiders across the country were flabbergasted.

"It is 1979 bravado with 1985 facts," said one plugged-in Tory, referring to Clark's bungled confidence vote in 1979 and the 1985 Liberal-NDP accord that ended 42 years of Tory rule at Queen's Park. "The government will fall," he lamented.

With files from Robert Benzie

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