MONTREAL - As he watched the dismal results roll in Tuesday night, Stephane Dion was ensconced at an airport strip hotel in Montreal that served as the perfect metaphor for his battered Liberal party.

The Sheraton Four Points Hotel was in the midst of a major renovation. Wallpaper peeled along the hallways. Gaping holes marked the locations for missing light fixtures. The indoor swimming pool was empty.

The once mighty self-annointed Natural Governing Party, its coffers drained, is itself in need of a drastic overhaul after emerging 0-2 in its last two election battles. And its members may not be willing to cut their leader much slack.

Dion's most earnest efforts failed to convince enough Canadians to back a carbon tax plan that, however noble, proved too tough a sale.

"The Canadian people have spoken today and chosen another Conservative government," he told about 100 supporters in the small ballroom where media gathered to watch the results. By his side was his wife, Janine, and their daughter Jeanne, 20.

"We Liberals will do our part responsibly to make sure this parliament works. It's clear our economy...is the most important issue facing our country at this time.

"Canadians have asked me to be leader of the opposition and I accept this responsibility with honour."

Dion did not offer to resign, and refused to answer questions about his future as he arrived to give his concession speech.

The owlish professor-turned-politician defied two central political tenets in this election campaign: avoid overly complex policy and, above all, don't even suggest new taxes.

His beloved Green Shift attempt to tax pollution was lauded by environmentalists and 250 economists.

But on the campaign trail, it became more of a Green Albatross around Dion's slender neck, forcing him over and over again in the face of a Tory advertising onslaught to stress that any new levies on polluting fossil fuels would be offset by income tax breaks.

In the end, Dion's impassioned calls for voters to "go green vote red" weren't enough. While the Conservatives were held to a minority government, the Liberals were leading or elected in just 74 seats, down from the 103 claimed in 2006.

An increased popular vote for the Green Party of just over six per cent ate into what might have been Liberal support, while a strong campaign push by the New Democrats turned into 37 seats -- some of them also coming at Dion's expense.

"He just didn't catch on," said one Liberal campaign insider who spoke on condition of anonymity. "He had a good three or four days before a good (leaders') debate. Then we stalled.

"I think the Liberals are going to do a lot of soul searching over the next few days."

Dion reportedly clashed with advisers or repeatedly ignored their input during the course of a rocky five-week campaign. And while his swift response to global financial chaos briefly saw him rise in the polls within striking distance of the front-running Conservatives, he could not maintain the momentum.

He was quickly pushed back on the defensive amid concerns over consumer costs of his Green Shift plan.

At least one unidentified Liberal publicly mused that Dion would have needed to win at least 28 per cent of the votes or 90 seats to have any hope of leading the party into another election. That was the popular support won by John Turner in an otherwise disastrous result in 1984 -- enough that he carried on as leader only to lose again in 1988.

Liberals often privately point out that Dion was a compromise choice for leader for those seeking a more unifying figure than Michael Ignatieff or Bob Rae.

He was the top choice for just 17.8 per cent of Liberals -- a rickety base of steadfast support that is too small to see him through a leadership confidence vote required by the party constitution after an election defeat.

Only one Liberal leader in Canadian history has failed to become prime minister -- Edward Blake, who was at the helm for election defeats in 1882 and 1887.

Dion trailed the Conservatives by about 10 points nationally heading into Tuesday's vote. Liberal support had stalled at around 25 per cent according to numerous polls, not enough to match the 99 seats won in 2006.

Dion is notorious for a mile-wide stubborn streak and the kind of tenacity that steeled him for political battle with separatists in his home province. He was vilified and remains deeply unpopular in Quebec for his role as champion of the Clarity Act that set tough ground rules for any future referendum on secession.

Just last weekend Dion assured reporters that, win or lose, he has no plans to quit.

"I will never quit," he said. "I will stay for my country."