NDP Leader Jack Layton told reporters the Conservatives' announcement to expand employment insurance benefits to long-tenured workers was a step in the right direction but more action is needed. (CBC)

NDP Leader Jack Layton suggested on Monday that the Conservative proposal to extend employment insurance for long-tenured workers could be enough to garner support from his party and stave off an election.

"The announcement today appears to be a step in the right direction," Layton said in a prepared statement to reporters following question period. "There is much more that needs to be done as well.

"Our preference remains fighting for the unemployed rather than fighting for a second election," he said.

But Layton warned that his party had no intention of giving the government a "blank cheque" and that it will be studying the bill "very, very carefully."

Human Resources Minister Diane Finley announced Monday that the proposed legislation, which would cost $935 million, would provide from five to 20 weeks of additional benefits, depending on how long an eligible individual has been working and paying into EI.

Finley said the proposed legislation, aimed at workers who have worked seven of the last 10 years, is a temporary measure that will be phased out gradually as the economy improves.

"We believe that this is the right thing to do and that it is both fair and responsible," Finley said. "It would help Canadians who have worked hard and paid EI premiums for many years and who now find themselves in need of a hand up."

The NDP and the Liberals have been pushing for changes to employment insurance amid the economic downturn.

Some analysts have said the package is meant to woo the opposition parties ahead of a confidence vote that could come as early as Friday.

Earlier Monday, Layton suggested he would be open to negotiations with the Harper government but that the ball is in the prime minister's court.

Layton told CBC News on Monday that the NDP needs to see some real action from the government.

Following the EI announcement, New Democrat MP Paul Dewar said the proposal appears to be a "good start" and will be a "serious advancement."

"If they're going to put forward something that's going to help Canadians who are hard hit, we would be irresponsible not to seriously consider and support that," Dewar said.

Liberal Leader Michael Ignatieff has indicated that the package is not enough to save Prime Minister Stephen Harper's government from a confidence vote and that his party will vote against the government at the first opportunity.

On Friday, the government plans to bring forward a financial ways-and-means motion. The motion, which includes the popular tax credits for home renovation, is considered a confidence issue, and its defeat could trigger an election campaign.

It is still uncertain which way the Bloc Québécois will vote, but support from the NDP would be all the Tories need to stave off an election.

With files from The Canadian Press