OTTAWA - CANADA'S Conservative government softened its own stand on Saturday seeking to defuse confrontation with the opposition which is threatening to form a coalition to bring the Tories down.

Transport Minister John Baird said the government would no longer seek to remove public funding for political parties, a proposal that drew outrage from the opposition.

'It's not worth going to an election over,' Mr Baird told Canadian television network CTV on Saturday. 'We won't be proceeding with the changes to the political parties' funding.'

The political standoff fueled by the contentious project, presented in a fiscal update on Thursday, could have led to a Tory defeat in parliament. The cuts in public funding would affect the opposition more than the conservatives.

Just six weeks after Prime Minister Stephen Harper was elected for a second term, the opposition has vowed to succeed Mr Harper's minority team and has engaged in negotiations to replace him.

The three opposition parties have criticized the government for failing to launch an economic stimulus in the fraught economic environment.

Mr Harper responded on Friday evening by deferring to December 8 a vote on the government's plan and a censure motion by the opposition, avoiding a possible power grab or the nation's fourth elections in four years.

'Less than two months ago the people of Canada gave our party a strengthened mandate to lead Canada during the most serious global economic crisis in generations,' Mr Harper said.

'While we have been working on the economy the opposition has been working on a back room deal to overturn the results of the last election without seeking the consent of voters.'

Mr Baird's announcement aims to defuse the crisis and prevent the formation of a coalition government. But it may be insufficient to calm the opposition. -- AFP