Canadian Prime Minister Stephen Harper won re-election with a significantly stronger minority government and yesterday called for unity in staring down global financial turbulence.

The Conservative leader came just 10 or 12 votes short of a majority in the 308-seat Parliament but both he and Liberal opposition leader Stephane Dion reached out in recognising the seriousness of the economic challenges facing Canada.

"This is a time for us all to put aside political differences and partisan considerations and to work cooperatively for the benefit of Canada," Mr Harper, 49, told a victory celebration in his home town of Calgary.

"We stretch out a hand to all members of all parties asking them to join together to protect our economy and to weather this world financial crisis."

Mr Harper had run on providing a steady economic hand and his government was widely expected to offer public money soon to facilitate interbank borrowing to help Canadian banks.

He will still have to rely on the support of at least one of the three opposition parties to govern, but the Liberals said that they would cooperate at least for now.

"We stand ready to work with all political parties to make this Parliament work, because we have serious work to do," Mr Dion said as he conceded defeat. Underneath the surface the Liberals, who had drawn scorn from all sides over the past year for keeping the Conservatives in power because of their poor poll standings, suggested their patience might not be unlimited this time.

"I want to give Canadians an official opposition that's dignified, effective, attacks, holds Mr Harper to account and brings him down when the time comes," deputy Liberal leader Michael Ignatieff told CBC television.

Another senior Liberal, Bob Rae, said Mr Harper must still win the confidence of the House of Commons. Political analysts said with nearly twice as many seats as the Liberals, the Conservatives were almost certain not to be toppled for now, particularly as Liberal coffers are nearly empty and the party could be facing an internal battle to replace Mr Dion.

The Liberals will be licking their wounds after their worst showing in terms of seats since 1984 and their lowest percentage of the vote since the 1860s.

"I think my party failed to deliver a real cogent response to the economic and financial crisis," said defeated Liberal legislator Garth Turner.

Mr Dion, a francophone professor whose poor English went down badly in English Canada, had put most of his emphasis on a new carbon tax accompanied by income tax cuts and subsidies. That proved a tough sell at a time of relatively high energy costs.

Liberal rules stipulate that the party face a decision over whether to keep leaders who lose an election.

However, he gave no suggestion he would go willingly. "Canadians are asking me to be the leader of the opposition, and I accept that responsibility with honour," he said.

One of Mr Dion's problems was that he was competing with two other parties on the left nationally - the New Democrats and the Greens - along with a fourth party, the separatist Bloc Quebecois in the province of Quebec.

Each party argued it was the best one to deny Mr Harper a second term. Just as a split on the right guaranteed Liberal rule from 1993 to 2006, a split on the left helped the Conservatives.

The result is Canada's third straight minority government, and the second back-to-back one for Mr Harper, only the second Prime Minister - after Liberal Lester B. Pearson in the 1960s - to win two consecutive minority governments.

Factbox on issues in Canadian election campaign

Conservative party

• Led by Prime Minister Stephen Harper, elected in January 2006 after more than 12 years of Liberal rule.

• Emphasises need for steady hand during financial turmoil, with only small spending and tax cut measures.

• Has taken some steps to improve liquidity and promises to do whatever it takes to ease the credit crunch.

• Advocates carbon emission limits on big industry but strongly opposes Liberal carbon tax plan.

• Pushes crackdown on crime, including giving adult sentences to teen murderers and ending house arrest for serious crime.

• Proposes to strengthen the military and do more to defend Arctic sovereignty.

Liberal party

• Led by former Cabinet minister and professor Stephane Dion.

• Governed Canada from 1993-2006 and has run Canada more often than not throughout its history.

• Proposes carbon tax, accompanied by income tax cuts and subsidies for the poor.

• Wants meeting with financial authorities within 30 days of taking office to see what can be done to combat market turbulence.

• Would adhere to agreement to keep troops in Afghanistan till 2011 but does not rule out military spending cuts.

• Promises to make Canada richer, greener and fairer.

New democratic party

• Led by former Toronto city councillor Jack Layton.

• Has never been in power federally but has sometimes held the balance of power enabling it to influence minority governments.

• Would reverse C$50 billion in corporate tax cuts.

• Proposes new spending on housing, education and public transit.

• Promises to pull troops out of Afghanistan.

Bloc quebecois

• Led by former union negotiator Gilles Duceppe.

• Advocates Quebec's independence but has not made that a major issue in this campaign.

• Runs candidates only in Quebec.

• Generally advocates policies on the left, including more social spending.

Green party

• Led by Elizabeth May.

• Has never won an election for Parliament but won heightened profile when an independent member of Parliament joined the party on the day before the election call.