OTTAWA'Opposition MPs are denouncing Conservative plans for a narrowly focused inquiry into the business dealings between Karlheinz Schreiber and Brian Mulroney.

David Johnston, a special adviser to Prime Minister Stephen Harper, submitted a report to the government that rejected calls from opposition parties for an extensive, wide-ranging inquiry that would probe deeply into the affairs between Mulroney and Schreiber, whose links to the former prime minister go back 25 years.

He even suggested the inquiry commissioner might want to make the hearings more "efficient" by holding parts of the probe in secret.

The government has adopted the report, which was received Friday, but not released until yesterday.

"We will be acting on the recommendations that Professor Johnston has provided and a commissioner should be appointed very soon," government House leader Peter Van Loan told reporters.

Johnston rejected calls from opposition MPs for a wider inquiry, including a probe of questions surrounding the 1988 sale of Airbus jets to Air Canada and Mulroney's successful libel suit against the federal government for alleging that the former prime minister profited from kickbacks from that sale.

But he agreed there remain serious questions surrounding Schreiber's payments to Mulroney of at least $225,000 ' Schreiber says $300,000 ' shortly after the former prime minister left office in 1993.

"One of the questions that an inquiry could answer, directly and straightforwardly, is `What payments were made, when and how and why?' The uncertainty surrounding this question remains," said Johnston, president of the University of Waterloo.

"There's existed, and still exists, public concern over the disclosure of the cash payments and the services rendered for the payments," he writes.

Johnston also raises questions about Mulroney's declaration of the payments on his income taxes, saying his "treatment of the retainers, is, at a minimum, unusual in light of ordinary business practice," he said.

He says the inquiry should examine whether there was "appropriate disclosures and reporting of the payments."

A narrower inquiry would be more productive, he said.

"I remain convinced that any public inquiry should be a focused inquiry into specific matters of legitimate public interest, suitable to analysis through the public inquiry instrument, rather than a further, extensive examination of matters already considered by others," Johnston said.

Johnston stuck with the recommendation he first made in his preliminary report in January, urging a narrow mandate.

"A public inquiry represents a significant expenditure of limited public resources," he wrote.

Liberal Leader St??phane Dion expressed disappointment with the report.

But he said he hoped the inquiry commissioner would have the independence to let the probe go where the "evidence" pointed.

"We are deeply disappointed by how much the terms of reference are narrow. It's not what we were requesting from Mr. Johnston," Dion told reporters.

"This being said, the bottom line is that the Prime Minister must make sure that the commissioner will have the latitude to be guided by the facts and to let the facts take him where he needs to go," he said.

New Democrat MP Pat Martin (Winnipeg Centre) said the report "could have been written by the (Prime Minister's Office).

"If Dr. Johnston was paying attention, he'd have the same questions as the rest of Canadians," Martin said.

That includes questions about the fate of millions of dollars in "grease money" paid out by Schreiber in support of his business projects in Canada, he said.

Mulroney said in a statement that he would co-operate with the inquiry "within its mandate" recommended by Johnston.

The former prime minister said any new allegations of criminal wrongdoing levelled by Schreiber should be referred to the RCMP.

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