OTTAWA - Liberal Leader Stephane Dion vigorously defended Wednesday his proposal to impose a carbon tax, accusing the Conservatives of spreading lies about the Grit plan before they've even seen it.

Dion's spirited defence of the carbon tax idea followed a closed door caucus meeting in which Liberal MPs fretted that the Tories are winning the spin war so far.

According to one MP, caucus members "massively and aggressively" warned Dion that the sales job thus far has been abysmal. Dion has yet to provide details of his plan to put a price on carbon, allowing the Tories to define the proposal as a massive tax grab that will boost the price of gas to as much as $2.25 per litre.

Another MP said Dion was repeatedly warned that unless he develops a "bulletproof" communications strategy to counter Tory misrepresentations and soothe voter fears, the carbon tax proposal could sink the Liberals in the next election.

However, Dion later said he's confident the proposal will be well received.

"I'm always confident when you speak to the intelligence, the minds, the big hearts of Canadians," he said.

"We'll (make) our strategy known in the coming weeks and you will see . . . (Tories) have lied and lied again and Canadians will not be impressed by that and we Liberals will not be intimidated by that."

The carbon tax proposal is to be the central plank in the Liberals' election platform. Dion is expected to unveil the plan before the end of June and then spend the summer break trying to explain it to Canadians.

He's already promised the proposal will be revenue neutral, the carbon tax offset by reductions in income and business taxes. And he's stressed that it will not result in any increased tax at the gas pumps.

Insiders say the tax on carbon will be only part of a comprehensive plan that will include social and economic measures aimed at helping wean Canadians off of fossil fuels, cushion the blow for the most vulnerable and encourage alternative energy sources.

Indeed, Dion began Wednesday trying to spin his carbon tax plan as a way to actually help the elderly, the poor, rural Canadians and other heavily affected groups adjust to the new reality of sky-high fuel prices. He noted that gas prices have shot up to as much as $1.30 per litre because international demand is outstripping supply - a situation he suggested is irreversible.

"A country like Canada needs to win in this world where cheap oil is passe," Dion said.

"And we need to have the good strategies and especially to help the middle class and people in need."

Dion scoffed that, by contrast, Prime Minister Stephen Harper has "zero strategy" to put a price on carbon.

Liberal environment critic David McGuinty hinted at the kind of economic and social measures that will be part of Dion's plan for grappling with climate change.

"There are a whole series of fiscal and other measures that can be brought to bear that'll help Canadians make the shift (from fossil fuels)," McGuinty said.

"How they invest in their homes, energy efficiency investments, how we get around, production processes. Businesses are screaming out for new technologies. Why would we want to lose this race?"

Latest From ...