Prime Minister Stephen Harper named University of Waterloo president David Johnston on Wednesday as the impartial third party who will define the parameters for the Brian Mulroney inquiry.

Johnston, originally from St. Clements, Ont., is a former principal of McGill University and dean of the faculty of law at the University of Western Ontario. Harper said in the House of Commons Wednesday that Johnston also previously served on various provincial and federal task forces and committees.

According to the Western Economic Diversification Canada website, Johnston once chaired the National Round Table on the Environment and the Economy (NRTEE). Mulroney announced the creation of NRTEE in October 1988.

Johnston was also the debate moderator for the 1979 election. He repeated that role for the 1984 election in which Mulroney would go on to be prime minister.

In a statement released Wednesday afternoon shortly after the announcement in the House of Commons, Harper said he was confident Johnston would carry out his work "with diligence and rigour."

Johnston's appointment is effective immediately and a final report to the prime minister is due by Jan. 11. The report is to be written in both official languages.

It wasn't immediately clear after Harper's announcement on Wednesday whether Johnston would also be heading the inquiry itself.

"As I mentioned, Dr. Johnston has served various governments in various public policy capacities, and we certainly appreciate his willingness to serve once again in what will be a difficult [inquiry]," Harper said Wednesday, backed by applause from his cabinet members.

On Tuesday, Harper announced during Question Period that a public inquiry would proceed into corruption allegations levelled against Mulroney by German-Canadian businessman Karlheinz Schreiber. The Liberals and NDP, as well as the former Progressive Conservative prime minister himself, had called for a full public inquiry.

'We don't want a witch hunt'

Schreiber alleged in a written affidavit that he struck a lobbying deal with the former Progressive Conservative prime minister in 1993, claiming that Mulroney agreed to help him set up a pasta business in exchange for $300,000 in cash.

The signed affidavit also alleges that a Mulroney adviser asked Schreiber to transfer funds in connection with Air Canada's 1988 purchase of Airbus planes to a Mulroney lawyer based in Switzerland.

During Question Period on Wednesday, Liberal Leader Stéphane Dion accused Harper and his government of blocking previous attempts to examine the allegations.

"We don't want a witch hunt, but we don't want a whitewash, either," Dion said. "We want the truth, the full truth. Will the prime minister commit to a full public inquiry that will include himself, his office, his government and his minister of justice?"

'Eminent Canadian'

Harper praised Johnston as an "eminent Canadian" and said the government would follow his recommendations. But the prime minister also fired a salvo at the Liberal leader.

"Sooner or later, it will dawn even on the leader of the Opposition that the events in question did not occur under this government, but some of them did in fact occur under the government of which he was a member."

Harper also came under fire from NDP Leader Jack Layton, who said the Mulroney affair was just the latest in an "endless saga of Conservative and Liberal scandals."

"It's a lot like pulling teeth around here to get any action from the government," he said.

Layton also accused the prime minister of dragging his feet on naming the terms of reference on the inquiry.

"They're improvising," Layton said in French. "When are we going to have a plan?"

Johnston's terms of reference were released shortly afterward.

Mulroney's chance to clear name

In 1995, Mulroney filed a lawsuit against the federal government after his name was publicly mentioned in connection with an investigation into the sale of Airbus jets to Air Canada. He later received $2.1 million in an out-of-court settlement.

Mulroney said during a dinner with business leaders in Toronto on Tuesday night that a public inquiry into the latest allegations would give him the opportunity to clear his name.

"Twelve years ago I was falsely accused. I fought and won. Now it seems I'm going to have to fight again," he said at Tuesday's fundraiser. "I'm not pleased by this, but so be it. I'm going fight and win again."

None of the allegations have been proven in court.