Stephane Dion, leader of the Liberal party, said the parties felt it was time to "take action".

"We're ready to form a new government," he told a news conference.

The parties agreed that Dion would head a coalition government if it were formed after a successful no-confidence vote, despite the Liberal party suffering a heavy defeat in national elections only six weeks ago.

The coalition would reportedly try to govern for up to 18 months without seeking a new mandate, with the Conservatives in opposition. It would also develop an immediate $24bn economic stimulus package.

However, Dion's poor campaign performance means his choice is likely to be controversial and he has already agreed to step down next May once a replacement is chosen.

Conservatives' anger

The three parties began negotiating to oust Harper last week after the Conservatives released a financial plan the opposition criticised for not including measures to stimulate the weakening Canadian economy.

Conservatives have criticised the move by the three parties as illegal and as an undemocratic power grab by the Liberal party and its leader, which had failed to inspire Canadians in the October elections.

Analysts also say that Harper is unlikely to give up the reins of power without a fierce fight and some said this could lead to a constitutional crisis.

Jean-Pierre Blackburn, Canada's revenue minister, accused the opposition of trying to subvert democracy.

"I'm sure all Canadians will really ask themselves whether overturning the results of an election a few weeks later in order to form a coalition that nobody voted for and can govern only with the veto of the people who want to break up this country," he was quoted by Reuters as saying on Monday, referring to the Bloc Quebecois who have unsuccessfully sought the secession of Quebec from Canada. 

"Do they really believe that is in the interests of this country?"

The Liberals, New Democrats and Bloc Quebecois command 163 seats in the House of Commons while the Conservatives have 143 seats and two MPs are independent.