Liberal Leader Stéphane Dion said Wednesday that his party won't defeat the government on the federal budget, but also won't vote in favour of it.

"We'll find a way to not defeat the government and to express our disagreement with this budget," Dion said after a caucus meeting in Ottawa.

He said the Liberals will still have an amendment, but the party has decided not to take the government down in a vote of confidence over the budget.

Shortly after Finance Minister Jim Flaherty released the 2008 fiscal plan on Tuesday, Dion called it a "grab bag" with little substance.

But he added that the budget included measures Liberals had been pushing for in recent months and that its shortcomings were not serious enough to justify an election that Canadians don't want.

Liberal members later said a multimillion-dollar election would not be wise in the face of a possible economic slowdown and that the party will keep an eye on government spending.

Dion said he would wait until the right moment to call an election, but didn't say when that would be.

Both the NDP and Bloc Québécois were swift to say that they won't accept the federal budget and would vote against it in a confidence motion.

If the Liberals abstain, Prime Minister Stephen Harper's Conservative party will have enough votes for the budget to pass.

The Conservatives hold 126 seats in the House of Commons, while the Bloc Québécois, NDP and Independents account for 83. Liberals occupy 94 seats.

During Question Period later Wednesday, Dion again expressed his distaste for the budget and accused Harper of a lack of leadership.

Dion said the Liberals left a solid treasury and if the Conservatives had managed the public purse better, there would have been a better budget.

Harper quickly struck back.

"Let me just say to the leader of the Opposition, when he comes and makes ferocious attacks on a budget that he has every intention of allowing to pass, he simply has no credibility in those attacks."