Canadian Prime Minister Stephen Harper and leader of the biggest opposition group on Wednesday reached an agreement to avert a possible summer election.

The two sides agreed to form a panel to examine employment insurance (EI) reform, an issue that the Liberal Party views as priority. The party had threatened to topple the government if their demands were not satisfied.

The Liberals announced in a statement they would now vote in favor of the government's economic update on Friday, which would mean the Conservatives will stay in power.

Harper said he was "delighted" Canadians would not have to go to the polls in the summer and is "optimistic" that a deal on "realistic" changes to the EI system could be reached.

"The good news we have today for people is that the breakthrough we actually have is a willingness of the government and the Official Opposition to work together on an important public policy matter," he said at a press conference in the parliament.

Liberal leader Michael Ignatieff told reporters the deal provided a "break to the impasse" over EI and secured "substantial gains" from the government.

However, the government will not be safe for long. Under the deal, the panel will report back to the parliament by the end of September, when the Liberals could still force an election with a non-confidence motion.

The Liberals had threatened to trigger a summer election with a non-confidence vote on the government's economic update on Friday. The other two opposition parties have both announced they would vote against it. The government could be brought down if all three opposition parties joined their votes.

Harper's minority Conservative government was elected only in October 2008. With less than half seats of the House of the Commons, it needs the support of at least one opposition to survive.

(Xinhua News Agency June 18, 2009)