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The New Democrats and Bloc Quebecois held talks to form a coalition party well before the opposition's uproar over the government's fiscal update, Â鶹ӰÊÓ has learned.

NDP Leader Jack Layton was in talks with Bloc Leader Gilles Duceppe for a "considerable period of time," reported CTV's Ottawa Bureau Chief Robert Fife on Sunday.

Layton held a telephone-conference meeting with his caucus Saturday morning that was recorded by a Conservative member. According to the audio tape, Layton appears to take credit for the possibility of a coalition.

"Let's just say we have strategies. This whole thing would not have happened if the moves hadn't been made with the Bloc a long time ago and locked them in early," Layton says. "Because, you couldn't put three people together in one or three hours. The first part was done a long time ago."

He then goes on to say that the NDP "spotted and prepared for the opportunity and had taken the steps that were required, so that when the opportunity arose, which was when Mr. Harper made his disastrous strategic error by not providing stimulus to the economy and instead playing political games, we were able to move and things began to move very quickly."

Layton also says about the Bloc: "Nothing could be better for our country than to have 50 members who have been elected to separate Quebec...actually helping to make Canada a better place."

In recent days, the Liberals and NDP have been in talks to form a possible coalition, with the support of the Bloc.

However, the NDP has strongly denied they had a plan to unite with the Bloc before hand.

"Not at all, this is absolute nonsense," said Brad Lavigne, the NDP's communications director.

Lavigne told Â鶹ӰÊÓnet Sunday afternoon that the "lines of communication" between the NDP and the Bloc have been open, but that there was never a "deal" to form a coalition.

"Besides, why would you cook up a deal that only took you to 87 seats?" he said. "Cleary, you don't create a coalition with the two smallest parties in the House of Commons."

NDP Deputy Leader Thomas Mulcair said his party started formal alliance discussions with the Bloc as elements of the fiscal update became public on Wednesday evening.

Mulcair added that discussions between the three opposition parties continue, despite gestures from the Tories to end the political deadlock.

"The three opposition parties are of the same view: it's time to act. And that's what this is about. We're getting together, we're structuring ourselves, we're preparing, and this is what you're going to see in the coming days," he told Â鶹ӰÊÓnet.

Mulcair added that the NDP were also pursuing legal action against the Tories for listening in and broadcasting a private discussion.

"We're already in contact with senior lawyers in that regard," he said.

The news comes as the Conservatives try to stop coalition talks by retreating on measures in its fiscal update, including a proposal to ban public sector unions from striking. Finance Minister Jim Flaherty also said the government would table its budget early on January 27.