Liberal MPs are jockeying for positions in Paul Martin's cabinet and the rank and file are campaigning for party posts, leaving policy workshops barren of both people and ideas, say observers from rival parties.

"It's just this typically arrogant idea that they are the governing party, they're going to be in government forever and they don't need to discuss policy," said MP James Moore, who's monitoring the event on behalf of the Canadian Alliance.

"They're going to sleepwalk over a cliff if they keep up this arrogant attitude."

Despite Prime Minister Jean Chrétien's mention of his successor by name in his farewell speech Thursday after nearly a year of feuding, Mr. Moore said the schism between the two camps is as obvious as ever.

"Most Canadians are looking at this and thinking we have two men here on a tremendous ego trip, and neither one of them is putting the country first," he said.

"Canadians are looking for a new beginning."

Mr. Chrétien signalled that himself Thursday, warning about the threat of a united right - a warning that could just as easily be interpreted as being about fiscal hawks in the Martin camp.

"Canadians should beware of those on the right who put profit ahead of community . . . who put the narrow bottom line ahead of everything else," the prime minister said.

"Canadians should beware of those on the right who would reduce taxes at the expense of necessary public services . .n. (and) who do not care about reducing social and environmental deficits."

Clearly, the prospect of a merger between the Alliance and the Tories into a new Conservative party, something members of both parties will vote on next month, has put some spring in Mr. Moore's step.

"The next election is absolutely not a foregone conclusion. The new Conservative party is going to give the Liberals a real run for their money," he said.

Still, it wasn't as though delegates at the Liberal convention were just sitting around.

NDP MP Pat Martin said they were holed up in workshops late Friday, but learning about mounting successful campaigns rather than debating new policy initiatives.

"We have people passionately rallying to the microphones to fight for the issues that they care about; the Liberals spend their time learning how to win elections," Mr. Martin said.

"There's not a lot of substance in terms of policy work going on . . .but they've got their noses to the grindstone in far more practical ways than navel-gazing."

That's probably because Liberals are well aware of the threat not only from a united Conservative party, but from a rejuvenated NDP as well.

With popular former Toronto city councillor Jack Layton at the helm, longtime Liberal seats in Canada's most populous city could change colour when voters go to the polls, Mr. Moore predicted.

"There's probably a half-dozen seats in downtown Toronto that have the Liberals worried."

Mr. Moore's not the only one convinced that the NDP could be on the verge of a resurgence rooted in Toronto, where left-leaning councillor David Miller was elected mayor earlier this week.

"If I were Martin, I would be very worried about Jack Layton," said Henry Jacek, a politics professor at McMaster University in Hamilton. "I think Layton's going to really look exciting to people, and Martin's going to look utterly, utterly boring and stale. And I think he knows it."