Leaders deny Liberal-NDP merger talks

The leaders of the federal Liberals and NDP are pouring cold water on a CBC report that their parties have been holding secret talks about possibly merging to form a new entity to take on the Conservatives.

Liberal Leader Michael Ignatieff calleddiscussions of a merger "ridiculous," while NDP Leader Jack Layton said it was a "fiction."

"It makes no sense,"Ignatieff, standing alongside Liberal MPs Bob Rae, Dominic Leblanc and Marlene Jennings,told reportersWednesdayafter his party's weekly caucus meeting in Ottawa.

"I'm proud to be a Liberal and the people around me are Liberals and we're going to form a Liberal government, which means a progressive, compassionate and fiscally responsible alternative for Canadians."

Meanwhile,Laytoninsisted there weren't any merger discussions, notingthat Ignatieff already "walked away" from a coalition to replace Prime Minister Stephen Harper's government in early 2009.

"There's obviously some discussion going on within the Liberal Party about their issues," Layton told reporters in Ottawa. "I don't have any comment on that."

The NDP leaderalsonoted Ignatieff ensured enough Liberalswere absentfrom aTuesday night voteto let thebudget billpass its final hurdle in the House of Commons and stave off the minority Conservative government's defeat.

"As recently as last night, he made sure his party supported the Harper government in a series of policies that Mr. Ignatieff said he didn't support,"Layton said.

Duringa rowdyquestion period session on Wednesday, the prime ministerthrew a jab at Ignatieff when the Liberal leaderquestioned the government's spending for the upcomingG8 and G20 summits.

"They talk about a fake lake," Harper said, in reference tothe uproarover an artificial pool being constructed at the summit media centre in Toronto. "What we're learning from these coalition talks is that they've got a fake party over there."

'Get a grip': Rae

The commentscome after many Liberal insiders confirmed to CBC Newsthat discussions between the two parties are not just focused on forming a coalition after an election or co-operation before one, but on the creation of a new party amid rumblings of dissatisfaction over Ignatieff's leadership and the party's dismal position in recent opinion polls.

Warren Kinsella, a former adviser to former prime minister Jean Chrtien, told CBC News that "serious people are involved in discussions at a serious level."

But Rae, who ran against Ignatieff in the 2006 party leadership contest, said there was "no substance" to the rumours, and advised the media to "take a deep breath and get a grip.

"I think we all have to recognize that in politics, particularly toward the end of a session, all sorts of rumours start flying around, but this one has absolutely no substance that I can detect," said the Liberal MP.

Rae sparked speculation over a potential deal with New Democrats when he mused in a blog post about a coalition he was part of in Ontario 25 years ago as leader of the provincial NDP. But he again dismissed the importance of his blog post, saying "any link between that and now is non-existent."