UPDATE 2-Canadian opposition pushing to defeat government

(Adds opposition reaction, conference call)

By David Ljunggren

OTTAWA, Nov 30 (Reuters) - Canadian opposition parties on Sunday pressed ahead with talks on how to defeat and replace the newly re-elected minority Conservative government, which is in trouble after a bungled bid to strengthen its power.

The three opposition movements now say the government must be brought down because Ottawa's updated fiscal projections, released last week, failed to include stimulus measures to help the economy deal with the global crisis.

They brushed off an announcement from Finance Minister Jim Flaherty on Sunday that Ottawa would spend money to stimulate the economy, and that the next budget proposal would be introduced earlier than usual, on Jan. 27.

The fiscal projections had contained a bold plan to end public financing of political parties. The move would have crippled the opposition and made it difficult for them to fight the next election.

The Conservatives, who have a sophisticated fund-raising machine, rely much less on public financing than the others.

Under growing political and media pressure, the government withdrew the financing proposal on Saturday. Flaherty said it now plans to freeze public financing of political parties.

But the Liberals and New Democrats say they no longer trust the Conservatives and are in talks to form a coalition that would work with the Bloc.

"Those talks have been going extremely well ... . We're going to give Canadians the government they deserve, a government that respects and reflects their values," New Democrat legislator Thomas Mulcair told reporters on Sunday evening.

"I didn't hear anything in Mr. Flaherty's statement that backs us off this ledge," senior Liberal Party legislator Michael Ignatieff told CTV television.

Parliament is due to vote on a no-confidence motion on Dec. 8. If the Conservatives lose, the opposition parties would get a chance to govern Canada. Prime Minister Stephen Harper has been in office since February 2006.

CONFERENCE CALL CONTROVERSY

"They're just desperate to hang on to power and that's why they're making all these promises to change course but they don't have any credibility. That is the problem," said Liberal finance spokesman John McCallum.

The situation, which has hurt the Canadian dollar, grew murkier on Sunday when the government released the transcript of a conference call between New Democrat lawmakers.

It said the document shows the party had planned coalition talks long before the fiscal projections were released. Opposition officials said the call had referred to regular talks between the three parties.