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OTTAWA (Reuters) - Liberal leader Michael Ignatieff appeared to step back on Monday, at least partially, from a threat to trigger an early election, saying progress had been made after he laid down an ultimatum to the government.
Earlier in the day Ignatieff had threatened to topple the minority Conservative government of Prime Minister Stephen Harper unless it met a series of demands, the main one of which was to detail how it would expand eligibility for jobless benefits.
Harper quickly called a news conference to reject a general easing of eligibility requirements but said he was planning to allow the self-employed to opt into the Employment Insurance system this autumn.
Ignatieff appeared on national television shortly afterwards to say Harper's announcement might go some way to meeting the Liberals' demands.
"I think we made a little progress today," he told the Canadian Broadcasting Corp. "And the progress is toward making Parliament work for Canadians."
Ignatieff told CTV television that he was willing to listen to Harper's ideas for extending benefits to the self-employed and said he was ready to meet with the prime minister as early as Tuesday.
Ottawa is witnessing a major game of brinkmanship between the two men, who have had a chilly relationship since Ignatieff took over as Liberal leader last December.
Both insisted separately they did not want an election and said the public did not want one either.
The House of Commons is scheduled to vote on Friday on Conservative budget estimates, which are automatically confidence measures. If the Liberals do not support the financial measures, that would trigger what would be the Canada's fourth election in little over five years.
The Conservatives won last October's election with a strengthened minority, but must rely on the support of at least one opposition party to remain in power. The smaller New Democratic Party and the separatist Bloc Quebecois have both indicated they will vote against the budget measures.
Harper also said he would be happy to meet with Ignatieff to see if they could find some common ground.
"This government is committed to moving forward with some kind of coverage for self-employed people but that's not an easy question, it's not a back-of-the-envelope thing," he said.
Opinion polls show the Liberals slightly ahead of the Conservatives, but they do not have enough backing to guarantee an election victory.
Polls also show there is very little public enthusiasm for what would be a rare summer election.
Ignatieff's initial tough line reflected lessons learned by the Liberals after badly losing last October's election. Party members complained that in the lead-up to the vote previous Liberal leader Stephane Dion backed the government on too many confidence votes.
Ignatieff has said he only agreed to back the budget in January after the government promised to deliver updates on how it was spending C$46.2 billion ($40.5 billion) in stimulus projects over the next two fiscal years.
Harper presented the second fiscal update last week. Ignatieff said the 234-page document was not good enough, demanding more details on exactly how much money has been spent and how Ottawa plans to return the budget to surplus.
He also said the government must explain how it plans to handle the shortage of medical isotopes amid the prolonged shutdown of the Chalk River nuclear reactor in Ontario, which makes a third of the world's isotope supply.
At the end of the day, Ignatieff said he saw progress on the isotope issue but still wanted a better accounting of stimulus money and how the budget would be balanced by 2013-14.
Additional reporting by Louise Egan; editing by Rob Wilson