The government won't include a controversial proposal to end public subsidies of political parties in an upcoming confidence vote on the fall fiscal update, a spokesman for the Prime Minister's Office confirmed Friday.

Kory Teneycke told CBC News that only tax measures will be part of the ways and means motion, which was initially to be voted on by MPs on Monday.

Hours later, Prime Minister Stephen Harper announced all key votes would be delayed until Dec. 8 after opposition parties threatened to bring a confidence motion against the government and form an unprecedented coalition in its place.

"The portion dealing with political subsidies … will be part of a later bill," said Teneycke. 

It's a sharp reversal for Harper's minority government, which stated when the fiscal update was delivered on Thursday that the party financing measures would be considered matters of confidence.

"It is part of the government's fiscal framework and so the bill I'll introduce on Monday is a matter of confidence," Flaherty said in response to a direct question about whether the party financing cuts were worth sending Canadians to a second, $300-million election in two months.

Federal parties currently receive $1.95 for every vote they receive in a federal election, provided they win at least two per cent of the nationwide popular vote. The annual subsidy is used to pay for staff and expenses.

Cutting the subsidies would effectively gut the opposition parties, who are far more dependent on them than the Conservative party.

The Liberals and New Democrats quickly rejected the proposal and launched a series of discussions about forming a potential coalition government if the confidence motion fails to pass and the government is defeated. Former prime minister Jean Chrétien and former NDP leader Ed Broadbent are steering the talks, according to reports.

Teneycke said opposition parties are not acting out of concern for the economy, but because they're worried about losing the subsidies.

"It's surprising the opposition parties would act in such an undemocratic fashion," he said.

Teneycke said the government still supports cutting the subsidies during this economic downturn and will introduce them at a later date.

"The prime minister believes political parties need to do their share," he said

With files from the Canadian Press