OTTAWA - The fate of Stephen Harper's minority government and the coalition that sought to supplant it is now in the hands of Michael Ignatieff as he weighs whether to support the federal Conservative budget.

After consulting late Tuesday with his caucus, the Liberal leader appeared poised to try to wring more concessions out of Harper before guaranteeing his party's support.

Ignatieff, who is to announce his decision Wednesday morning, did not overtly tip his hand during what was described as a "grumpy" caucus meeting. But Liberals left with the impression that he intends to propose an amendment to address some of the deficiencies his MPs identified in the budget.

A senior Liberal confirmed it's unlikely Ignatieff will choose to support the budget without any changes.

"I think it could even be a flat no or there could be an amendment," the insider said. "But those are the only two options".

Publicly, Ignatieff offered only a brief, ambiguous assessment shortly after the budget was delivered.

"There are some positive sides to this budget which I believe are the result of the pressure and unity among opposition parties. But there are also negative aspects to this budget."

Ignatieff said he's worried the government may be underestimating the depth of the recession, which would make its deficit projections worthless. He also believes the budget doesn't do enough for the unemployed and that the billions promised for infrastructure projects may never actually flow.

Liberals privately suggested an amendment could include a proviso that municipalities receive their share of federal infrastructure funding, even if they can't afford to ante up matching funds. It could also specify that the unemployed must receive jobless benefits immediately, doing away with the two-week waiting period.

Finance Minister Jim Flaherty declined to discuss whether he's willing to change such elements of his budget.

If a Liberal amendment was rejected by the government but won the support of the other two opposition parties, it could provoke a confidence showdown that could yet topple the government.

But it's far from certain Liberal MPs want to push things that far. While they enumerated the budget's shortcomings during the caucus meeting, sources said no one directly urged Ignatieff to defeat the government.

On their way in to the meeting, a number of MPs frankly admitted they were wrestling with what to do.

Toronto MP Judy Sgro said she expected the budget would be designed to garner Liberal support but was surprised that it fell short.

"It's not going to be a slam dunk, I can assure you of that. I thought it would've been but it's not going to be."

Toronto MP Rob Oliphant said he's "absolutely torn" about whether to support it.

"I see signs that they listened and I see signs they didn't hear a thing".

While some of it is hard to swallow, Oliphant said there doesn't appear to be any "flaming poison darts" in the budget.

Scott Brison, chair of a caucus economic advisory committee, said the budget is a "hodgepodge. . .of individual measures, some of which make sense, some of which don't go far enough, there's a few missteps and a few baby steps in the right direction."

Bloc Quebecois Leader Gilles Duceppe and NDP Leader Jack Layton immediately panned the budget and vowed to vote against it, leaving the fate of the Harper government entirely in Ignatieff's hands.

For the past few weeks, Ignatieff has laid down a number of broad conditions for Liberal support of the Tories' economic blueprint. He's said it must protect the vulnerable, save jobs today and help create the jobs of the future, all while being fair to the various regions and without plunging the country into deep, long-term, structural deficits.

Tuesday's budget professes to do all those thing but Ignatieff said he wants to pour over the budget's details before making a final decision. He was to meet with advisers following the caucus meeting.

Liberals also want time to assess the political repercussions of their choice, aware that the ground is strewn with landmines whichever direction they decide to go.

"The one thing we do know about all these choices is that we don't live in a risk-free universe," said Bob Rae, Ignatieff's formal leadership rival and erstwhile champion of the coalition idea.

"Any step that's taken is going to have pluses and minuses so we'll just have to make an assessment of those."

Defeating the government is risky. That would put the Liberals at the mercy of Gov. Gen. Michaelle Jean who would have to decide whether to call a February election, which Ignatieff says the country needs like a "hole in the head," or give a Liberal-NDP coalition, propped up by the Bloc Quebecois, a chance to govern.

While Liberal prospects have improved since Ignatieff took over the helm from the hapless and unpopular Stephane Dion, polls suggest an election now would be a tough, uphill slog. The new leader needs time to prove himself to voters and to rebuild and refinance his cash-strapped party.

And while public resistance to a coalition government has softened somewhat since Ignatieff took over, the notion remains unpopular everywhere but Quebec. Ignatieff himself has always been lukewarm to the idea and insiders suggest the initial enthusiasm within caucus has cooled commensurate with polls suggesting the Liberals could actually win an election in their own right given a bit more time.

But allowing the budget to pass, with or without amendments, presents another set of problems.

First of all, should Tory fortunes plummet as the recession deepens in the coming months, Ignatieff may well want to force an election. But having let something as crucial as the budget pass, he may be hard-pressed to concoct a compelling excuse for toppling the government later.

Moreover, Liberals anticipate that the next election, whenever it comes, will be fought over who can best manage the economy. They're counting on Harper taking the blame for the misery many voters will suffer during the recession.

Allowing the budget to pass, however, will make it harder for Liberals to slam the Tories' economic record. Indeed, they could wind up sharing the blame.

On that score, some Liberals are most worried about the appearance of backing the Tory plan to run up nearly $85 billion in deficits over five years. That could damage the Liberals' best electoral asset - their claim to be the fiscally prudent party that eliminated deficits in the mid-1990s - and make them unwilling accomplices to Harper's ideologically-driven agenda to ultimately shrink the size and power of the federal government.

Liberals are also worried about what happens once the budget is out of the way. None of them has much, if any, trust in Harper's newfound mood of bipartisan co-operation. They suspect he may once again start issuing ultimatums on crime bills and other legislation, particularly if he believes Liberals are afraid of forcing an election.

"If everything is all good and well in terms of the budget and doing the right things for Canadians, it'll be a judgment call on whether or not we believe we can trust (Harper) in the interim," said P.E.I. MP Wayne Easter.

Liberals are acutely aware that the threat of an opposition coalition is the only thing that's rescued them from the humiliation of having to repeatedly back down in the face of confidence votes that could topple the government. No one wants to fall back into that pattern, which sapped Liberal morale throughout Dion's two-year tenure.

Yet if Liberals allow the budget to pass, the coalition will be essentially dead. Left at the altar, the NDP and Bloc would likely be less keen to enter into any kind of union with the Liberals in future.

In any event, most constitutional experts agree that the governor general would seriously consider the coalition option only if the government fell within six months of last October's election. After that, she'd likely accede to Harper's preference and call an election.

Layton has been using that argument to turn up the pressure on Ignatieff. He predicts that if Liberals give the budget a pass Harper will quickly revert to bullying the opposition by declaring even the most minor bills to be matters of confidence.

"You can't have confidence in Mr. Harper when he moves into that (nice-guy) tone. He reverts all too quickly to the my-way-or-the-highway approach to governance," Layton said Monday.

"I think that's what'll happen in the spring after the coalition window passes."

Latest From ...