MONTREAL - The Quebec government has formed an investigations unit to examine allegations of collusion and corruption in the province's construction industry.

The unit will oversee "Operation Hammer" and will include members of Quebec provincial police, Crown prosecutors and Mounties, Public Security Minister Jacques Dupuis told a news conference Thursday.

"As we've already said, the current situation is worrisome and unacceptable," Dupuis said. "And that's why we're taking the necessary steps to make sure this kind of behaviour stops."

The move comes amid reports that companies linked to the Italian Mafia have dabbled in political affairs and essentially created a construction cartel that works to drive up the cost of building projects.

Mafia experts say the practice exists elsewhere in Canada and is particularly worrisome now that Ottawa and the provinces are embarking on the most expensive infrastructure program in Canadian history.

Quebec has been rocked by reports that Mafia-linked construction companies have colluded to drive up the price of public-works projects by 35 per cent in the Montreal area.

Earlier in the day, the Quebec government brushed off widespread calls for a public inquiry into the murky world where politics, the Mafia, and the construction business allegedly interconnect.

"For the moment, the best way to get to the bottom of things is through police investigations," Dupuis, a former Crown prosecutor, said in the legislature during a raucous question period.

"Let the police do their work and we'll see what they come up with."

His comments came the same day as an online poll suggesting a majority of Quebecers wanted a sweeping public inquiry.

Christian Bourque of Leger Marketing said 76 per cent of respondents indicated support for an inquiry, while only 17 per cent did not.

The survey of 505 Quebecers was conducted over the Internet on Oct. 20 and is considered accurate within four percentage points, 19 times out of 20.

"People have the right to transparency and the only way is through a public inquiry," said Stephane Bedard, Parti Quebecois house leader.

"Why refuse to the population the right to the truth, the right to transparency?"

The ongoing scandal has tossed Montreal's current municipal election campaign into disarray.

The former leader of the opposition party at city hall quit the party after claims he had dealings with a businessman at the centre of a cancelled $355 million water-meter contract that has been an endless source of embarrassment for Mayor Gerald Tremblay.

Tremblay's opponents have both asked for public inquiries.

Guy Chevrette, a retired PQ minister who was also part of the Cliche Commission in the 1970s that investigated Quebec's construction industry of the day, says a public inquiry is necessary.

"There (are a) number of subjects that warrant study by experts," Chevrette said.

Without answers and recommendations to change the culture, the problem is likely to persist, Chevrette said.

"Police will de-mask the fraudsters," Chevrette said.

"But (police investigations) don't offer the dimension of finding solutions and alternatives."

Those sentiments were also brought up this week by retired judge John Gomery, who headed the famous inquiry into the federal sponsorship scandal.

Gomery said large donors wield too much influence in the awarding of municipal contracts and that a public inquiry could serve to explore those ties.