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MONTREAL (Reuters) - Prime Minister Stephen Harper said Friday he will look to form a third minority Conservative government if he's denied a majority in Monday's general election, but he signaled little willingness to compromise with the opposition if that happens.
Harper has argued throughout the campaign that Canada's economic stability requires that the Conservatives win a majority of the 308 seats in the House of Commons. But a surprising surge by the left-leaning New Democratic Party has cast that goal in serious doubt.
Friday's remarks continued a sometimes mixed message from Harper as his campaign has seemingly struggled to switch from attacking the Conservatives' traditional rivals, the Liberals, to fighting the NDP, which usually trails in a distant third.
The Conservatives have ruled with two successive minority governments since 2006, requiring the support of at least one of the opposition parties to remain in power -- a position Harper says the economy can not longer tolerate.
Harper told a Montreal rally Friday he was optimistic the Conservatives would attain their goal, but party insiders have whispered privately that the NDP's newfound popularity has put a majority in serious doubt.
Asked how the Conservatives would keep a new minority government alive and ease fears in investment markets about Canada's political stability, Harper said he would not accept demands by the opposition that could hurt the economy.
"We are not prepared to do that," Harper told reporters at the start of a campaign bus tour between Montreal and Toronto, Canada's two largest cities.
"We will accept any mandate from the Canadian public, but my fear is that if we have a minority mandate the other parties will not accept it," he said.
In an interview Thursday Harper warned that the possibility of a government led by the left-leaning New Democrats would scare away foreign investors, but he gave no such warning in his Montreal appearance.
No polls predict the New Democrats will win the most seats in Parliament, but having leapfrogged over the struggling Liberals they seem poised to win enough seats to form the official opposition.
Two polls released Friday showed the New Democrats closing in on the Conservatives and leaving them with almost no chance of winning a majority.
Many investors seem to be taking the political surprises in stride.
"Our base-case expectation is that there will be no major ideological shift in the political landscape and that the market will return its attention to second-half hikes by the Bank of Canada and continued economic growth Tuesday," David Tulk of TD Securities said in a market note Friday.
NDP leader Jack Layton told Reuters Thursday his party would clarify laws on foreign takeovers, and said he would like the Bank of Canada to hold off on raising interest rates for now if it hurt job growth.
Canadian political leaders rarely comment on where interest rates should be, and the NDP was forced to scramble Friday, saying they respected the central bank's independence.
Conservative Finance Minister Jim Flaherty said the remark was "amateur hour."
The New Democrats have stunned political observers as they benefit from voter disenchantment with the other two main national parties as well as Layton's strong performance in the leadership debates.
Layton was scheduled to campaign in British Columbia on the Pacific Coast Friday, where the New Democrats expect to pick up seats from the Conservatives.
Their strongest polling gains have come in Quebec at the expense of the Bloc Quebecois, which shares similar economic policies but favors independence for the largely French-speaking province.
Because the New Democrats usually fade late in election campaigns, losing votes to the Liberals, they may face obstacles in converting their newfound popular support into actual votes Monday.
As well, their surge could split the center-left vote with the Liberals, pollster Ekos cautioned, leaving a path clear for the Conservatives to "back into a majority."
With reporting by Randall Palmer, Louise Egan, Rod Nickel and David Ljunggren; editing by Rob Wilson