The deal would last for at least 18 months and make outgoing Liberal leader Stephane Dion prime minister, replacing Stephen Harper. The Liberals are to name a new leader May 2.

They, along with the socialist New Democratic Party and separatist Bloc Quebecois claim the Conservatives' economic policy announced last week didn't sufficiently address the country's economic crisis.

The National Post said Harper didn't speak with reporters Monday when the deal was announced but was quoted as saying all legal means would be explored to "resist this undemocratic seizure of power" from his 7-week-old government.

The Liberals, NDP and Bloc have 163 seats in Parliament to the Conservatives' 143.

Among his constitutional options if the coalition brings the government down on a non-confidence vote when it resumes next week is asking the governor general to dissolve Parliament and call another election. Harper could also suspend Parliament until his government releases its budget on Jan. 27, the Globe and Mail said.