The Ontario Court of Appeal has temporarily stayed the extradition order to Germany against Karlheinz Schreiber until the Supreme Court of Canada decides whether it will hear an appeal in the case.

Schreiber is facing a variety of tax and fraud accusations in Germany and has been fighting an extradition order since 2004.

Earlier this month, a panel of Ontario Court of Appeal judges decided not to intervene in the 2004 extradition order against Schreiber.

His lawyers have since sought permission from the SCC to appeal the decision before the country's highest court. No date has been set for when the SCC will hear the leave to appeal.

"There was an agreement that the stay would be in place until the Supreme Court of Canada either dismisses his leave to appeal or, if they grant leave to appeal, until the final disposition of the Supreme Court," Schreiber's lawyer, Eddie Greenspan, told reporters Friday after the decision.

The Justice Department has told Schreiber's lawyers that it will not fight Friday's ruling.

Schreiber's next step will be to push for bail.

"From the time that we filed in the Supreme Court of Canada, he could well have sought bail... and he will seek bail," said Greenspan.

Greenspan said he will seek bail for Schreiber with the Department of Justice.

"If they do not consent then I will seek bail in court," he said.

Greenspan also said that in any other case a stay would have been automatic.

"I think there are people in Ottawa who are in power would like to get rid of him," he said.

Despite Prime Minister Stephen Harper's call for a public inquiry, "the minister of justice (Rob Nicholson) has done everything in his power to get Mr. Schreiber out of here before that inquiry and that makes no sense," said Greenspan.

He said it looked like the government was making a concerted effort to appear like they want a public inquiry while what they really want is to send Schreiber back to Germany.

Schreiber is currently being held in an Ottawa jail following an appearance before a parliamentary ethics committee Thursday.

He was transferred on Wednesday from the Toronto West Detention Centre so that he could testify about his business dealings with former prime minister Brian Mulroney.

Specifically, MPs wanted to know about $300,000 in cash he gave Mulroney shortly after he left office.

Surprising testimony

Schreiber surprised the committee Thursday by saying the $300,000 he paid to Mulroney was supposed to be $500,000, but that the former prime minister didn't do the work that was expected of him.

Schreiber, who was brought to Parliament Hill in handcuffs, initially refused to answer any questions. But he eventually began to selectively answer some inquiries.

He offered few details on what was involved in the cash payments, saying the money which was given to Mulroney shortly after he left office was "for future services."

He said that Mulroney was supposed to help secure military contracts, and he claimed services were never fulfilled.

At one point during his testimony, Schreiber also said that the money was to help Mulroney's financial situation after leaving politics.

Schreiber also contradicted Mulroney's claim that the money was for consultation services for a pasta business.

In the past, Schreiber has claimed he spoke with the former prime minister in June 1993 while he was still in office. He reiterated that claim before the committee, but then he waffled. He said the meeting may have taken place in July, when Mulroney had left politics.

Mulroney has denied all allegations of wrongdoing -- none of which has been proven in court -- made by Schreiber.

Importantly, Schreiber told the committee that he doesn't believe that Mulroney did anything illegal. He said he did not lobby on Schreiber's behalf in any government, including Conservative governments.

Letter of apology

Schreiber said he was shocked when he heard Prime Minister Stephen Harper deny that he had received an apology letter from Schreiber to Mulroney.

Schreiber told the committee that Mulroney used his former solicitor-general, Elmer MacKay, to persuade him to issue an apology letter to Mulroney.

Elmer MacKay is the father of Defence Minister Peter MacKay.

Schreiber said he was told that Mulroney needed the letter "so badly to prove" to Harper that he was on good terms with Schreiber.

A month after receiving the email, Schreiber claims he sent a modified version to Mulroney.

Schreiber told the committee that he was told that Mulroney had showed the letter to Harper at the prime minister's official cottage at Harrington Lake in August 2006.

In return for the letter, the federal Justice Department was then supposed to "do the right thing" and end its attempts to send Schreiber back to Germany, said Schreiber.

That didn't happen and Schreiber told the committee that the "whole thing was a set-up" since Mulroney and his spokesman have quoted from the letter as evidence that the cash payments were proper.

The defence minister said Friday that he has told his father not to associate with Schreiber.

"It was my opinion for a number of years that he should not associate with Mr. Schreiber, and I voiced that opinion," MacKay told reporters.

When asked why MacKay expressed that opinion, he added "I was leery, that's all."

He said he hasn't spoken to his father about the letter but admitted that he had met Schreiber a few times -- once during a family gathering.

The Globe and Mail reports that Schreiber had helped arrange for Peter MacKay to work in Germany for Thyssen Henschel.

"When I was working with that company for a very short time, I had no idea who Mr. Schreiber was, or what his association was with Thyssen Henschel, I had never met him," MacKay said.

Schreiber will remain in jail in Ottawa until he testifies before the committee again next Tuesday.

He will be allowed to visit his home in Ottawa's Rockcliffe neighbourhood and wherever else he needs to go to access documents before the committee reconvenes.