Michael Ignatieff watched the debate on the uncertain electoral fortunes of his party descend into finger-pointing and denials on Wednesday even as he tried to beat back speculation that the Liberals might embrace the NDP in a bid to defeat Stephen Harper.

He dismissed reports of merger talks with the New Democrats as ridiculous – but even Liberal MPs privately concede the party may be forced to debate this option if the next election leaves their political fortunes unchanged.

In all this, Mr. Ignatieff is being dogged by past political leaders – including former prime minister Jean Chrétien – who are urging collaboration with the NDP.

Liberal MPs acknowledge there’s rising anxiety and restlessness in the ranks in the face of sagging poll numbers for the party and the fact Mr. Harper has managed to dodge political blowback for controversies such as the Guergis affair.

“There certainly is an angst that is setting in,” said a senior Liberal MP who spoke on the condition of anonymity. “Some of this is cyclical but nonetheless it’s not going away and is therefore worrisome.”

The MP said there’s merit to considering a merger with the NDP but that it’s counterproductive to carry on such a debate before the next election. “Michael should be able to run an election as leader,” the parliamentarian said.

The next ballot will determine whether there’s room for a debate. It will depend, the MP said, on whether “we continually split the centre-left four ways – Bloc, NDP, Liberal and Green – and Mr. Harper continually wins with 34 or 35 per cent, or gets a majority.”

Since Britain formed a coalition government last month, the halls of Parliament Hill have swirled with casual chatter about possible coalitions after the next Canadian election. The story took a new twist this week when veteran Liberal Warren Kinsella told the CBC that high-level talks were taking place toward merging the Liberals and the NDP into a new party, possibly called the Liberal Democrats.

Mr. Ignatieff emerged from caucus Wednesday to reject categorically the notion that serious negotiations are under way on a merger.

“We had some discussion of this ridiculous discussion of fusion of the two parties,” Mr. Ignatieff told reporters. “No one has any authorization to even discuss this matter. It’s ridiculous. I am a Liberal. I am proud to be a Liberal. The people around me are Liberals.”

Mr. Ignatieff distanced himself from Mr. Kinsella, who he had briefly tapped last fall as the leader of the party’s next campaign war room, saying “I have no relationship with Mr. Kinsella.”

Liberal MP Bob Rae, a former leadership rival of Mr. Ignatieff’s, also poured cold water on the idea of talks, saying “the leader speaks for all of us on these issues.”

NDP Leader Jack Layton was equally unequivocal, dismissing merger talk as fiction.

“To have a discussion, you need to have two sides, two participants, and we don’t have that. ... Nobody’s assigned to talk to anybody about these topics,” Mr. Layton said.

As his credibility came under attack, Mr. Kinsella responded with an affidavit sworn on Wednesday that claims Liberal Party president Alfred Apps told him on May 11 that “there is a lot of interest in merger with the NDP. There have been many discussions at a high level.” Mr. Apps accused Mr. Kinsella of “dramatically” twisting his words and that he was only passing on what he had heard from an “NDP friend.”

“I just frankly don’t understand what he’s trying to accomplish,” Mr. Apps said.

Late Wednesday, Liberal Party member John Mraz also swore an affidavit backing up the idea of cross-party talks. He alleged Mr. Apps told him on June 3 that he’d been involved in discussions about co-operation between the Liberals and the New Democrats and that talks included Mr. Chrétien, former Saskatchewan premier Roy Romanow and former NDP leader Ed Broadbent,

Mr. Ignatieff has already ruled out an informal partnership – or coalition – with the New Democrats before the next ballot, but said he would be open to the idea if the next election doesn’t produce a majority government.

Any talk of mergers, however, threatens to divide the right and left wings of the Liberal Party. Left-of-centre Liberals tend to have more in common concerning policy with centrist New Democrats such as Joe Comartin or Peter Stoffer than they do with right wingers in their own party such as former deputy prime minister John Manley or former New Brunswick premier Frank McKenna.

Beyond the public comments of Mr. Kinsella, recent comments by Mr. Chrétien are also fuelling speculation. The former Liberal prime minister, asked by CBC recently if he favoured a coalition with the NDP, replied: “If it's doable, let's do it.”

Mr. Romanow also told CBC that “maybe a coalition would be something that can be put on the plate and considered."

In a recent online column for The Globe and Mail, senior New Democrat Brian Topp, who would not comment for this story, suggested the two former leaders are pressing their parties to co-operate.

“Judging from these snippets [from Mr. Chrétien and Mr. Romanow], they seem willing to think in creative and new ways about what a solid majority of Canadians may well be open to: a new Canadian political chessboard, which might improve the odds that Stephen Harper's government will be replaced, very soon, to the immense benefit of the country,” wrote Mr. Topp. “On the positive side, we can tell that we might be on to something because it is making Prime Minister Stephen Harper nervous. “

However, Mr. Topp’s comments appeared to be focused toward a future coalition rather than an outright merger as discussed by Mr. Kinsella.

“The truth of it is that Harper does not like talk about coalitions because he has no friends in the House of Commons, and is therefore not in a position to form one,” Mr. Topp wrote.