February 28, 2019 / 4:58 PM / 22 days ago

UPDATE 2-Top ally backs embattled Canada PM, easing pressure over crisis

(Adds opposition seeking police probe, former top Trudeau aide seeking to testify, finance minister denying wrongdoing)

By David Ljunggren

OTTAWA, Feb 28 (Reuters) - Canadian Prime Minister Justin Trudeau won the public support on Thursday of a top political ally, indicating there was no immediate pressure inside his Liberal Party to oust him over a deepening political scandal.

Trudeau, rejecting an opposition call for his resignation, disputed allegations on Wednesday by his former justice minister that government officials inappropriately pressured her to help the SNC-Lavalin construction firm avoid a corruption trial.

The testimony from Jody Wilson-Raybould threatens to badly damage the Liberals just months ahead of what polls suggest will be a hard-fought election.

In an unusual move, Foreign Minister Chrystia Freeland appeared on the Canadian Broadcasting Corp to say she fully backed Trudeau.

"Of course I support the prime minister 100 percent ... I am very clearly of the view that the prime minister would never apply improper pressure," she said.

Freeland, one of the most prominent members of the Cabinet, is seen by some observers as a possible successor to Trudeau.

Andrew Scheer, leader of the official opposition Conservative Party, who on Wednesday called on Trudeau to quit, formally asked the head of the Royal Canadian Mounted Police to probe the matter. Scheer said in a letter that it was illegal "to attempt to obstruct or defeat the course of justice."

Wilson-Raybould, who complained about pressure from Gerald Butts, Trudeau's then-principal secretary, said she did not consider the officials had broken any laws. Trudeau said the police had not contacted anyone in his office.

Butts, who quit earlier this month while proclaiming his innocence, asked on Thursday to speak to the justice committee to address Wilson-Raybould's remarks.

One top Liberal official said there was no talk for now of a challenge to Trudeau's leadership. In the Canadian political system, party leaders are elected at formal conventions and cannot be deposed by a simple vote of legislators, which means any move to push out Trudeau would be lengthy.

But another senior Liberal Party member said there was growing unhappiness among legislators about how Trudeau's team had handled the SNC-Lavalin matter and that the prime minister needed to replace some of his staff.

"The level of concern over what has happened over the last few hours is unprecedented," said the Liberal, who requested anonymity given the sensitivity of the situation.

MAJOR EMPLOYER

SNC-Lavalin is a major employer in the province of Quebec, where the Liberals have said they need to pick up seats to stand a chance of retaining a majority government. Liberal officials said media coverage of the affair in Quebec had been generally favorable.

Trudeau told reporters on Thursday that "Canadians expect their government to look for ways to protect jobs, to grow the economy and that's exactly what we have done ... we've also done it in a way that has respected our laws".

Wilson-Raybould said she had confronted Trudeau in September over what she said were persistent efforts by officials to help SNC-Lavalin evade trial on charges of bribing Libyan officials. Wilson-Raybould said she made clear she was not prepared to help the company avoid a trial, which is now pending.

Wilson-Raybould said staff working for Finance Minister Bill Morneau had continued to press her to help the firm even after she asked them to stop.

Morneau told reporters that his officials had not behaved inappropriately and like Trudeau, stressed the importance of protecting jobs.

Wilson-Raybould was unexpectedly given a less prominent job in January and resigned from the Cabinet this month. She said she was convinced her refusal to give way on the SNC-Lavalin case had prompted her demotion.

Reporting by David Ljunggren; Editing by Bill Trott and Peter Cooney

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