Canadian Prime Minister Paul Martin said he will resign if an official probe into a government financial scandal showed he had been aware of what was going on.

Mr Martin insists he did not know that government officials had taken C$100 million ($76 million) from a sponsorship fund designed to promote national unity in French-speaking Quebec and given it instead to advertising firms closely tied to the ruling Liberals.

Asked by reporters in Quebec City whether he would resign if the probe showed he had known about the scandal, he replied: "Absolutely".

The Liberal government has been in turmoil since a report last week revealed the extent of the scandal, which took place from 1997 to 2001 - a time when Mr Martin was finance minister.

Mr Martin, who took over as prime minister from Jean Chretien in December, has ordered a public inquiry into what happened and says those guilty of wrongdoing will be brought to justice.

"I don't know where the money went and in order to find out where it went we have to put no limits of the ability of the (inquiry) to look," he said.

Mr Martin said he wants the inquiry to start quickly. Similar investigations in the past have lasted up to 18 months.

"I have said that I am quite prepared to testify in front of the inquiry. In fact, I would be very anxious to do so," Mr Martin later told reporters in Montreal.

He praised Mr Chretien as "a man of integrity" but Liberal insiders fear the probe could exacerbate tensions between supporters of the two men and undermine the party as it plans for an early federal election.

Mr Martin was grilled for two hours by listeners to a nationwide phone-in show on CBC radio and television on Sunday and accepted partial responsibility for the scandal, which he admitted had become "a very large problem" for the Liberals.

Until recently, Mr Martin's aides had said he planned to call an election for May 10 to take advantage of the party's popularity. But polls now show the Liberals slumping in the polls - though still in first place - and many callers on Sunday told Mr Martin they did not want an election until the inquiry had finished its work.

"On the one hand I think people certainly have the right to know how all that (the inquiry) turns out. On the other hand they have the right to say that a new prime minister and a new government... should seek a mandate," said Mr Martin, declining to say whether the scandal would affect the election's timing.

Mr Martin - who said he is "mad as hell" about what happened - has appeared before the media every day since the release of the report and will travel across Canada this week to stress his determination to clear up the scandal.

"I imagine that everyone is furious and disgusted but what's important now us that we're cleaning things up ... and we're discovering the truth," he said.