Haunted by yet another scandal, Joe Volpe said Monday that he'll continue in the Liberal leadership race despite new allegations that his camp signed up party members who were already dead.

"I'm staying in the race to win the leadership and to form the next government," Volpe told an Ottawa news conference Monday.

As he left the conference, Volpe was heckled by two protesters dressed as ghosts, one carrying a sign that read "Volpe has spirits."

The Toronto Star reported Saturday that the Volpe camp had allegedly paid the $10 membership fee for at least nine party members it signed up in Montreal. The report also alleged that two new Liberal members signed up in Montreal were dead and several had been signed up without their knowledge.

"Allegations are not definitive convictions, they're allegations and if you allow them to go uncontested then you might as well say goodbye to the democratic process," Volpe, who has promised his own investigation as well as one by the Liberal party, told CTV's Mike Duffy Live on Monday.

Liberal Party rules stipulate that new members must sign their own membership form and pay their own fee. New political financing laws also make it illegal for a campaign to pay membership fees.

Referring to the dead party members, Volpe insisted his team was not interested in signing up members who would not be showing up at the December convention in Montreal.

"I wouldn't go and sign up somebody who is deceased because that person can't come and vote," Volpe told Mike Duffy Live.

Smear campaign: Volpe

The Star reported that it uncovered the alleged improprieties by using membership lists of the Quebec wing of the party, which are supposed to be confidential. Leadership candidates have to sign a declaration that promises the lists will not be shown to outsiders.

However, some unnamed Volpe supporters suggested that a number of high-profile Quebec Liberals in rival Michael Ignatieff's team have been running a smear campaign against their contender. The Ignatieff team hasn't responded to the allegations.

Volpe suggested Monday that he was not the choice of the party "establishment.''

An Italian-Canadian, Volpe said despite having lived in Canada for "51 years," he had been warned he might be seen as an "outsider'' or "not Canadian enough.''

Suspecting another smear attempt by a rival camp, members of Volpe's campaign and the media tried to reveal the identities of the two ghoulish protesters by attempting to rip their masks off.

Ignatieff controversy

Meanwhile, a complaint was filed Monday with the Liberal party alleging that 60 members were signed up improperly by Ignatieff's camp in two Toronto-area ridings -- including one man in Ignatieff's constituency said to have died two years ago.

The complaint lists 48 members in Ignatieff's Etobicoke-Lakeshore riding who have allegedly admitted they did not sign a membership form or pay the membership fee, as required by party rules and electoral law.

It includes signed statements from three of the members who each declare that "my membership fees were kindly paid for by the Michael Ignatieff leadership campaign.''

As well, the complaint lists 11 members in the riding of Brampton-Springdale who all gave the same home address, which the complainant alleges is actually an Indian restaurant.

Brampton Springdale is held by MP Ruby Dhalla, a top Ignatieff supporter.

The complaint was filed by George Kunz, a longtime Liberal from Burlington who said he's not affiliated with any of the leadership camps.

He said he began "doing some digging'' after hearing about irregularities from several Liberal friends.

Ignatieff backer, former cabinet minister Denis Coderre, said Monday that Ignatieff was the race's front-runner and that he didn't need to resort to dirty tricks to win.

Warfare

The Conservatives and the NDP wasted no time targeting their Liberal rivals Monday over the latest party blunders.

In the Commons Monday, Tory MP and Treasury Board President John Baird referred to Volpe as the member from "Six Feet Under," instead of his Eglinton-Lawrence riding.

"The Liberals are so desperate for new members that they've taken to the Ouiji board and séances and grave robbing," said NDP MP Charlie Angus.

Liberal and former prime ministerial aide Scott Reid told CTV's Newsnet that the Liberal Party feared this type of warfare among the leadership candidates and "didn't need more controversy."

Meanwhile, at a news conference Monday, leadership contender Bob Rae said the allegations "can't be allowed to hang around, they've got to be looked into and examined thoroughly by the party."

CTV's Ottawa Bureau Chief Robert Fife said the allegations could only hurt the party. "This is not going to make the Liberal Party very happy," Fife told Newsnet.

"These allegations that he (Volpe) signed up dead people and other bogus members seriously tarnishes the Liberal party's image as they're trying to recover from the Liberal sponsorship scandal" in Quebec that helped drum the Liberals out of office during the last election.

Volpe's campaign has been plagued by controversy.

Last spring, he was forced to return $27,000 in donations given to his campaign by minors, including 11-year-old twins.

The kiddie donations were part of $108,000 donated by 20 current and former executives of generic drug giant Apotex Inc., their spouses and their children. Each donated the legal maximum of $5,400.

The race

Last week, a Strategic Counsel poll of Liberal Party members conducted for The Globe and Mail and CTV showed Ignatieff has a slimmer than expected lead in the race, with 19 per cent support.

Rae was a close second and Stephane Dion was close behind, while Volpe was well back in the pack.

Fife said it was "inevitable" that Volpe would eventually pull his bid but the candidate told Mike Duffy Live Monday that he was in it until the end.

If he does give up his leadership ambitions, Fife said Volpe would likely back Rae's camp because of "bad blood" between his campaign team and Ignatieff's.

"That's going to be very important support for Rae because Volpe has a significant number of delegates he can throw to him," said Fife Monday.

With files from CTV's Robert Fife and the Canadian Press