SCENARIOS: Suspension, election or coalition in Canada?

OTTAWA (Reuters) - Whether Canada's Conservative minority government holds on to power or an opposition coalition takes charge depends on finely argued and rarely applied constitutional principles.

The three opposition parties -- the Liberals, the separatist Bloc Quebecois and the leftist New Democrat Party -- signed a formal agreement on Monday seeking to install a Liberal-NDP government with the explicit support of the Bloc.

Here are possible scenarios on how events could play out:

SUSPENDING PARLIAMENT

The minority Conservative government of Prime Minister Stephen Harper could legally seek the temporary suspension of Parliament this week, an act known as proroguing.

Such a maneuver would prevent any confidence votes being held until Parliament reconvenes. One possibility is for Parliament to return on January 26 -- currently when it is scheduled to come back from vacation -- and then for the annual budget to be delivered the next day.

That may only delay the execution, in that the three-party coalition could still topple the government. But it would give the government time to mobilize public opinion against the coalition and to present a stimulus-laden budget that could prove too embarrassing for the opposition to vote against.

The opposition has justified its moves by saying the government has failed to move aggressively enough to stimulate the economy in the face of the deepest global slowdown in decades.

The outcome could turn, however, on whether Governor General Michaelle Jean agrees to suspend Parliament. A former television journalist appointed by the previous Liberal government, she is the representative of Queen Elizabeth, Canada's head of state, and must assent to the idea. The opposition will argue that she should refuse to suspend Parliament and let the government face confidence votes.

CONFIDENCE VOTES

If the governor general does not agree to suspend Parliament, the government is expected to face one or two confidence votes shortly after 6:30 p.m. (2330 GMT) next Monday. The government would lose those votes since the three opposition parties have more seats than the Conservatives.

In that case, Harper would be expected to visit Jean, perhaps the next morning, and ask her to call an election.

ELECTION CALL

Jean would then have to decide whether to trigger another election, less than two months after the October 14 vote that returned the Conservatives with a strengthened minority in Parliament.

Harper says it would be undemocratic to install the coalition in power without the partners having to face the electorate. The opposition parties say they would enjoy the confidence of Parliament and should be allowed to govern.

If she agrees to an election, January 19 is the earliest one could be held.

COALITION TAKES OVER

If Jean refuses to call an election, she would turn over power to a coalition headed by Liberal leader Stephane Dion. Because of Dion's defeat in the October election, he has agreed to step down on May 2 and turn over the prime ministership to one of three candidates who are running to replace him as Liberal leader.

The Bloc says it would help build the coalition's budget speech and overall policy direction. It has guaranteed its support at least through mid-2010, and the other two parties have agreed to stay together at least through mid-2011.

The Liberals would take 18 cabinet posts and the NDP six portfolios, each appointed by Dion.

(Editing by Frank McGurty)