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NIAGARA FALLS, Ontario (Reuters) - Prime Minister Stephen Harper, his Conservatives under siege from the New Democrats before the May 2 election, warned on Thursday his left-leaning rivals would wreak havoc with a fragile economy.
But Harper, clearly sensing that the chances of turning his minority government into a majority might be fading, also opened the door to compromise with the opposition in order to stay in power.
The NDP has never held power nationally, and Harper said that while a government the NDP might lead would not last long, it would "do a lot of destruction."
"The alternative the opposition offers, symbolized most dramatically by the NDP, are enormous increases in government expenses, the raising of taxes, the raising of prices," he said, adding it would radically affect jobs and the economy.
The NDP's sudden rise has shaken up a sleepy election campaign that for long promised to yield a government headed by the Conservatives or the Liberals, the only parties that have ever governed Canada.
The NDP, now second in the polls behind the Conservatives, are proposing significantly higher taxes and spending than the other two parties, and the possibility of them coming to power has ruffled some financial feathers.
Unusually for western economies, all three major parties pledge to balance the budget in several years.
Polls indicate the Conservatives would win the most seats. But if they win fewer than half, as in 2006 and 2008, they would need support of another party to stay in power.
Harper displayed newfound willingness to try to avoid that course. "Obviously if you're in a minority, you do your best to bring people together," he said in a CTV interview.
If the Conservatives fell, the NDP could win the chance to form a minority government, with support from other parties, something unimaginable only a week or so ago.
The NDP, which promises to raise corporate taxes and put in a cap-and-trade plan to curb carbon emissions, is now nipping at Conservative heels, just 7 or 8 points behind. Pollster Nik Nanos said the NDP was set to win the second most seats after the Conservatives.
Liberal leader Michael Ignatieff, almost totally eclipsed by NDP leader Jack Layton, said the NDP's plan to increase spending by about C$70 billion ($74 billion) was unaffordable.
"It's time for Mr. Layton to get under the microscope," he said in Quebec City.
Layton, however, is exulting in the new-found attention and he sought to turn the barrage to his own advantage.
"We see these other parties on the attack," Layton said in the northern city of Yellowknife.
"We've got some attacks of our own that we want to launch. What are they? We want to attack poverty, that's what we want to attack. We want to attack climate change. We want to attack unemployment and a shortage of family doctors. We want to attack retirement insecurity, we want to attack the issues facing First Nations and people right across the north."
The Conservatives, in power since 2006, picked up a qualified endorsement from Canada's most influential newspaper, the Globe and Mail, which said Layton was "putting a benign gloss on his party's free-spending policies".
"Only Mr. Harper and his Conservative Party have shown the leadership, the bullheadedness (let's call it what it is) and the discipline this country needs," the Globe said.
The New Democrats still face the challenge of getting out the vote, given that they have a weaker organizational structure than either the Liberals or the Conservatives. The party is still in third place in Ontario, which has more than one-third of the seats in Parliament.
Additional reporting by Rod Nickel and David Ljunggren; writing by Randall Palmer; editing by Janet Guttsman and Rob Wilson