OTTAWA - Opposition parties announced a deal to soon dethrone Canada's ruling Conservatives and bring in a leftist coalition headed by Liberal leader Stephane Dion.
"We are ready to form a new government," Dion told a press conference. "This will be a Liberal-led government in collaboration with the New Democratic Party and with the support of the (separatist) Bloc Quebecois."
The near unprecedented move follows the government's release on Thursday of proposed fiscal measures that opposition parties angrily denounced as failing to bolster Canada's sagging economy.
The government's plan also included a cut to subsidies for political parties that would have bankrupted at least one of the three opposition parties and a temporary public sector strike ban to 2011.
The basket of measures was widely criticized for provoking leftist opposition parties and for leading to what could become a constitutional crisis if the Conservatives and the coalition tussle for control.
Conservative Prime Minister Stephen Harper said earlier Dion was "about to play the biggest political game in Canadian history."
This scenario has only occurred once in Canada before, during the First World War in 1917.
Harper characterized the power grab as "undemocratic" and pointed out it required Dion to "do a deal with the separatists in order to get the power the voters denied him at the ballot box."
"We are going through an unprecedented economic crisis," countered Dion.
Since its reelection on October 14 with a stronger minority, in Canada's third federal elections in four years, Harper's government has shown it has "no plan, no competency, and has no will to face up to the crisis effectively," he said.
"Given the critical situation facing our fellow citizens and the refusal and inability of the Harper government to deal with this critical situation, the opposition parties have decided that it was now time to take action."
In a bid to stem the revolt, Harper's finance minister, Jim Flaherty, back-pedaled over the weekend on his contested fiscal measures.
Flaherty also moved up his annual budget by six weeks to January 27 and said it would include an economic stimulus demanded by opposition parties to bolster Canada's sagging economy.
"I think that we should at least wait for the budget to determine the future of a government that has just been elected by the Canadian public," Harper urged.
But opposition parties said the new measures were "too little, too late" and they no longer trusted Harper.
"Mr. Harper, your government has lost the confidence of the House," said New Democratic Party leader Jack Layton.
"It will be defeated and replaced at the earliest opportunity so I am asking you to accept this decision graciously."
In a bid to forestall his government's demise, Harper had delayed a December 1 censure motion and a vote on the government's fiscal project to December 8 -- the earliest the government can now be defeated.
Observers suggested that if the coalition is not sidelined by then, Harper may prorogue parliament to the end of January to give himself even more time.
Governor General Michaelle Jean, who is currently visiting the Czech Republic, must also still approve the coalition's bid to govern. She may instead opt to hold snap elections.
Dion said the coalition would try to govern at least until the end of June 2010, if it succeeds in taking control, with 18 Liberals and six New Democrats in his cabinet.
Together they would unveil an immediate fiscal stimulus that includes new infrastructure spending and support for Canada's struggling auto and forestry sectors, but puts the federal budget in deficit for the first time in 12 years.
Dion himself would step down as prime minister before his coalition ends, he said.
After his party's disappointing showing in the October elections, the Liberal leader announced he would resign once a replacement was chosen at a convention in May.
Either the son of a former governor general MP Dominic Leblanc, former Harvard professor Michael Ignatieff or former Ontario premier Bob Rae are likely to replace him.
It is not clear if Harper would accept the role of opposition leader or quit politics, if his government is ousted.