OTTAWA - Michael Ignatieff began his tenure as Liberal leader with a blunt challenge to Stephen Harper: change your ways or we'll bring you down.

Ignatieff, who was named interim party leader Wednesday, said he's prepared to vote down the minority Conservatives and form an opposition coalition government.

But he said it will all depend on the prime minister and what's in the federal budget on Jan. 27.

Ignatieff said that while other countries have taken action to deal with the economic crisis, "Harper has shut down Parliament."

"Stephen Harper's government is not providing Canada with the leadership or stability it needs ... he's offered no hope, no solutions, no plan for our country," he told a news conference.

"Where Mr. Harper has failed, we can succeed."

Ignatieff accused Harper of being "spiteful" and "divisive," and said he must change his ways.

Ignatieff must decide whether to bring down the government over the federal budget and -- if so -- whether he will seek an election or push a Liberal-NDP coalition backed by the Bloc Quebecois.

Ignatieff's ascension to the Liberal throne puts the opposition coalition in some doubt. He has suggested the coalition is merely a useful threat to wring budget concessions out of Harper, referring to his approach as "coalition if necessary, but not necessarily coalition."

He repeated that threat Wednesday.

"I told the caucus this morning very clearly I am prepared to vote non-confidence in this government and I am prepared to enter into a coalition with our partners if that is what the Governor General asks me to do," Ignatieff said.

The Liberal national executive voted unanimously Wednesday for Ignatieff after consulting with about 800 key Liberals across the country.

Liberal MPs and senators also unanimously endorsed Ignatieff, who is to be acclaimed as permanent leader at a convention in Vancouver in early May.

In a show of solidarity, Bob Rae -- who withdrew from the leadership race Tuesday -- nominated Ignatieff at the closed-door caucus meeting. The lifelong friends and one-time university roommates then hugged.

"When Bob Rae and Michael Ignatieff embraced, it was hard to keep a dry eye," Toronto MP Martha Hall Findlay said afterward.

"It was just an extraordinary moment."

New Brunswick MP Dominic LeBlanc -- who pulled out of the leadership contest Monday to throw his support to Ignatieff -- seconded Rae's motion.

Stephane Dion, whose accelerated resignation as leader cleared the way for Ignatieff's coronation, joined the former rivals in appealing to the fractious party to unite and rally behind their new leader.

"There's a unity and strength in our caucus that I've never seen before," said MP Mark Holland. "I think there's a whole new day for our party."

The Vancouver convention was supposed to be the culmination of a six-month leadership contest. But the party short-circuited the democratic process in a stampede to stabilize its leadership before heading into a potential parliamentary showdown over the federal budget.

Despite Ignatieff's insistence that he will base his decision on the budget, many Liberals continued to say they have no confidence in the government and doubted anything in the budget will change that.

"Mr. Harper has lost the confidence of the House and he ran away from the legislature by proroguing," said Montreal MP Justin Trudeau.

Holland said the coalition is "very much a viable option" which Liberals will be more likely to adopt if the Conservatives unleash a series of personal attack ads against Ignatieff, as they did so effectively against Dion.

"If they keep pouring poison into Parliament and keep spitting vitriol, I see it as very unlikely that they have a very long future in this Parliament," Holland said.

Dion, who negotiated the coalition deal with the NDP, said its fate is now in Ignatieff's hands. But he added: "I strongly support it."