MARKHAM, Ont. - Premier Dalton McGuinty appears to be extending the olive branch to his opposition rivals as Ontario heads into its first minority parliament in 26 years.

Just one seat shy of a majority, McGuinty said Thursday he intends to deliver a "strong, steady, stable" government despite his reduced mandate.

"The best way to do that is to find ways to work with the opposition parties," he said after touring Huawei, a telecom company in Markham, north of Toronto.

"And we will find occasions for them to become involved in a more explicit way in lending shape to our agenda."

McGuinty said he also wants to move quickly to get back to work, given the global economic uncertainties.

He plans to install a new, smaller cabinet Oct. 20 to go along with the reduced Liberal presence in the provincial legislature, but wouldn't say when parliament will return.

Next week's shuffle is the first step to getting things back on track after the Liberals lost four ministers in the Oct. 6 election that saw them reduced from 72 seats to 53.

"We want to move quickly," McGuinty said. "We want to position ourselves to confront any challenges that may be out there for us to manage."

He said the new cabinet will focus on jobs and the economy, two issues that were also raised as key priorities by the opposition parties.

The Liberal agenda will also include "protecting our schools and our health care," he added.

McGuinty wouldn't say whether key ministers would retain their portfolios in the upcoming shuffle, such as Health Minister Deb Matthews.

But Finance Minister Dwight Duncan, who was immediately re-appointed after the election, has already been tasked with preparing an update on the impact of the global economic downturn on Ontario.

McGuinty promised the update will come shortly, but wouldn't set a date.

Despite his diplomatic overtures, McGuinty has been accused of shutting out the enlarged opposition parties by rebuffing NDP Leader Andrea Horwath's invitation for a meeting of all three party leaders earlier this week.

Progressive Conservative Leader Tim Hudak, who hasn't spoken publicly since last week, didn't accept the invite either. He's expected to break his silence Friday when the newly elected Tory rookies arrive at Queen's Park for a party-sponsored MPP boot camp.

Although he's never experienced a minority parliament in his long political career, McGuinty says he can make it work "day to day" on an "issue-by-issue" basis.

He also denied there's a charm offensive underway to lure an opposition member to cross the floor and provide him with a majority government.

"There will be all kinds of opportunities for Ms. Horwath and Mr. Hudak to lend shape to a positive forward-moving agenda," McGuinty said.

"I think, in particular, the relationship between our house leaders becomes very important."

Horwath has already named veteran MPP Gilles Bisson as NDP house leader, but the Tories and Liberals have yet to appoint his counterparts, who negotiate weekly on what legislation will be brought forward for debate.

It's unclear whether McGuinty will be able to satisfy the demands of the opposition leaders, even though both say they don't want to trigger another election right away.

Two campaign promises that McGuinty is putting at the top of his list -- reducing tuition fees for full-time college and university students whose families earn less than $160,000 a year and home retrofitting for seniors -- may not sit well with the Tories, who want to rein in government spending.

The Tories and NDP may also team up to force McGuinty's hand on removing the provincial portion of the HST from home heating bills -- a promise they both made during the election.

Conservative Christine Elliott said her party wants to make parliament work and will focus on providing relief for families and creating private-sector jobs.

"The other thing that we really need to deal with is to get the government spending under control, because that's something that in the international context is becoming more and more pressing," she said.

"We've got urgent issues about the United States and Europe. We've got to get this under control because we don't want to be in a situation three years from now that looks like what some European countries are in right now."

Once the Liberal ministers are chosen, the next step is to nominate candidates for the role of Speaker, who must be chosen before the legislature can return with a throne speech.

The opposition parties are reluctant to put forward any names from their ranks to avoid tipping the balance in favour of the Liberals.

The Progressive Conservative won 37 seats and the New Democrats have 17 -- leaving the opposition parties with 54 seats, one more than the Liberals.

The governing Liberals are ultimately responsible for putting forward a candidate if the Tories and NDP hold out, but can't nominate anyone from another party. The Speaker cannot be a leader of a political party or a cabinet minister either.

The Liberals would lose a seat if one of their members becomes Speaker, who acts as the legislature's guardian and political referee during Question Period.