Liberal Leader Michael Ignatieff has called reports of a merger between his party and the NDP "ridiculous."

"No one has any authorization to discuss such a merger," a clearly-annoyed Ignatieff told reporters Wednesday.

NDP Leader Jack Layton called the speculation "fiction" and countered that the Liberals and the Tories had already formed a de facto alliance of their own.

"Yesterday the Liberal-Conservative coalition rammed through their 100th confidence motion together," Layton quipped during question period. "Normally you would be asking that they at least get a marriage certificate after that."

Layton was referring to the passage of the 2010 budget bill on Tuesday. Thirty Liberal MPs were absent during the vote, to ensure that the bill passed.

"What else is this group going to support together? The privatization of the CBC? Extension of the war in Afghanistan?"

The CBC reported Tuesday that senior Liberals and NDP members were holding secret talks to merge their parties, even going so far as to suggest they had already chosen a new name – the Liberal Democrats.

CTV's Power Play host, Tom Clark, said his sources in the NDP and Liberal Party have called the merger speculation "nonsense."

"It's not happening," he said.

He suggested pre-election talk of an NDP-Liberal merger most benefits the Conservatives.

"They are not shy about ratcheting up talk of a Liberal-NDP merger in an attempt to get a positioning line for the next election campaign," Clark said.

The CBC quoted former Liberal strategist Warren Kinsella in their report. He described the talks as "serious."

However, Ignatieff was dismissive of Kinsella, who had a falling out with the current Grit leadership.

"I have no relationship with Warren Kinsella," Ignatieff said, flanked by some of his top Grit MPs, such as Bob Rae and Dominic Leblanc, following a caucus meeting.

Accused of lying, Kinsella issued a sworn affidavit declaring that he met with Liberal party president Alf Apps last month and that Apps told him, "There have been many discussions at a high level…involving the NDP saints."

However, Apps told CTV News by email that Kinsella was the one who brought up the merger.

"I listed all the reasons off the top of my head why it would not work," Apps wrote.

Meanwhile, Immigration Minister Jason Kenney referred to the Liberals' response on the merger report as evidence of a "self-obsession."

"There is so much confusion going on in the Liberal party," he said on CTV's Power Play. "What I don't understand is, Canadians want us to be focused on the economy, they want us to be focused on tackling crime -- and all they're hearing the Liberals talking about is themselves."

In earlier interviews, Ignatieff has said he would consider a coalition following an election, but ruled out any pre-election merger or coalition with the NDP.

A recent The Canadian Press-Harris Decima poll suggested more than half of Canadians favour some form of co-operation between the two parties.

With a report from CTV's Chief Parliamentary Correspondent Craig Oliver