Liberal Leader Stephane Dion wants any public inquiry into the Brian Mulroney-Karlheinz Schreiber affair to also examine some actions by Prime Minister Stephen Harper's government.

"I am particularly concerned that your terms of reference could be interpreted very narrowly to limit your review only to 'those allegations respecting financial dealings between Mr. Karlheinz Schreiber and the Right Honourable Brian Mulroney,'" he writes in a letter sent Sunday to David Johnston, the academic appointed to review the affair.

"While it is clearly important for you to review those financial dealings, I believe that it is equally as important for you to examine how the current government has handled this particular file."

In the letter, Dion asked Johnston to include the following:

• The management, follow-up and response to correspondence sent by Schreiber to Harper, his staff and members of his cabinet;
• The Department of Justice's decision not to proceed with an internal examination into the possibility of setting aside the Government of Canada's settlement with Mulroney;
• The possibility of conversations or correspondence between the current Prime Minister or any of his staff or cabinet ministers, and Mulroney or his representatives, relating to this file; and
• The possible politicization of the process surrounding Mr. Schreiber's extradition case.

Harper announced Wednesday that Johnston, the president of the University of Waterloo, would be the third-party investigator looking into the Mulroney-Schreiber affair.

Schreiber alleged in a recent court affidavit that he first discussed business dealings with Mulroney while the latter was still prime minister. Schreiber eventually paid Mulroney $300,000 in cash in 1993 and 1994.

Mulroney has denied doing anything improper and supports the calling of a public inquiry.

The opposition has raised alarm bells over the fact that Schreiber sent Harper a letter months ago outlining his allegations. But the letter apparently never reached Harper, despite its politically charged contents.

• Related: Schreiber known as man 'with suitcase full of cash'

Schreiber is also facing extradition to Germany to face charges of tax evasion and other offences. The federal government has until Dec. 1 to decide whether to extradite him or hold him for testimony at a public inquiry.

Schreiber has said he won't co-operate if he is sent back to Germany.

Johnston has until Jan. 11 to recommend terms of reference for a public inquiry.

"Mr. Johnston is free to propose any terms of reference that are in any way connected with the events in question," Harper said Thursday.

Limiting the inquiry?

Liberal House Leader Ralph Goodale told CTV's Question Period that the written instructions to Johnston from the Conservatives are designed to limit the inquiry to historical concerns rather than current-day issues.

"There are a whole series of issues that raise questions in the minds of a lot of people about how this prime minister's office has handled this affair," Goodale said.

Conservative MP Pierre Poilievre told Question Period that the Liberals "are trying to 'modernize' a historical event."

NDP MP Paul Dewar said his party believes it's important to look at the arrangement between the government of Canada and Mulroney and determine if there was a breach.

Mulroney sued the government and received a $2.1 million settlement and an apology after the then-Liberal government wrote the Swiss government in 1995 and alleged that Mulroney and Schreiber might have been involved in a kickback scheme involving the Airbus deal.

When the settlement offer was made, however, the $300,000 in payments weren't publicly known.

"Was there a breach in the contract?" Dewar asked.

Mulroney said this past week that he fought to clear his name 12 years ago, and he is prepared to fight again.

Liberal foreign affairs critic Bob Rae told Question Period that Canadians need some answers on the $300,000, but also on the more recent developments involving the Conservative government.

The inquiry needs to be focused, he said. "We don't need or want a soap opera that's going to go on for years and years and years."

Conservative strategist Tom Flanagan said a two-stage inquiry should be considered, the first being to see if anything has really changed that's worth investigating.

"It may be that the new allegations don't lead to any strong evidence that would cause you to re-open the file."