TORONTO - John Tory is leaning towards staying on as leader of Ontario's battered Progressive Conservatives, but hasn't yet made a final decision, party sources said Tuesday as Tory prepared to face his caucus members for the first time since the Liberals claimed election victory two weeks ago.

Although Tory has talked to all caucus members privately and called most of the other 106 Conservative candidates, sources say he is still "spending a lot of time on the phone'' and hasn't decided whether to subject himself to a party leadership review in February.

Tory's leadership has been in question ever since the Liberals strolled to a comfortable majority and Tory failed to win his Toronto seat. Still, a source close to Tory said people shouldn't expect any quick declarations at Wednesday's Conservative caucus meeting.

"John is continuing to consult with the party before making his decision on what is best for the party,'' the source said.

The meeting is expected to be more of a post-mortem on the election results, and each caucus member will get time to talk about what they feel went wrong.

While some caucus members are rallying around Tory following the loss, saving their vitriol for his senior election advisers, others want to hear their leader explain why the Conservatives are still sitting in opposition.

Conservative John Yakabuski wouldn't say whether he wants Tory to remain as leader, but did note he'll face a challenge if he opts to remain as leader without a seat in the Ontario legislature.

"There are some challenges, but he is our leader,'' said Yakabuski, adding he's anxious to hear Tory's perspective on the election campaign.

"We have a lot of issues we have to address as a caucus and as a party . . . We have to analyze why we're sitting here in opposition in about the same position that we were when we left.''

Still, others are rallying around Tory, saying they hope he doesn't make any rash decisions and sticks it out. Conservative veteran Bob Runciman, who has met privately with Tory, said it could be the new year before any major decisions are made.

"I think (Tory's) inclination is to take some time and talk to people and I don't think there is anyone trying to encourage him to make a speedier decision,'' Runciman said. "People understand there is no need to rush into a decision that you might regret.''

Wednesday's caucus meeting will give members a chance to sound off about a campaign that was dominated from the outset by the party's contentious proposal to give $400 million each year to private religious schools that opted into the public system.

The caucus can have a "healthy opportunity to express those views in a frank and honest way'' and move on, Runciman said.

"Some of the disappointment in terms of what happened will certainly be aired,'' he said. "Hopefully we can go forward from here.''

Conservative Frank Klees, who has been fingered as a possible leadership contender, said Tory deserves continued support for making "incredible inroads into ethnic communities'' and for wiping out the party's debt.

Just because the Liberals were able to "distort the faith-based issue'' doesn't mean Tory should be forced out, Klees said.

"The amount of time and energy that he's invested over the last three years is going to be difficult for anyone to make up,'' said Klees, who is in Europe and can't attend Wednesday's meeting. "This is only his first election.''

Not having a seat in the legislature temporarily may actually be a good thing, Klees added. It will give Tory the freedom to visit ridings across Ontario, building up the party at the grassroots level, he said.

Conservative Garfield Dunlop said there is plenty of time for Tory to mull over his future and beat the Liberals the next time around.

"We know this faith-based thing was what caused our party to lose support but at the same time, we know that (Premier Dalton) McGuinty is kind of there by default,'' Dunlop said. "He's got a lot to prove.''