A government inquiry report on a money scandal at the center of Canadian politics for the past two years has cleared Prime Minister Paul Martin and blamed aides to his ruling-party predecessor, Jean Chretien, for a system of contract kickbacks and illegal political contributions.

In response to the report's release on Tuesday, Martin ordered his Liberal Party to repay about $1 million in political contributions, dismissed 10 party employees and sent the report to the Royal Canadian Mounted Police for use in criminal prosecutions.

In a raucous session of the House of Commons, Martin vigorously defended his government, while opponents stabbed their fingers at sections of the thick volume and shouted accusations. Most were in French, a reference to Quebec, the French-speaking province at the vortex of the scandal.

"The report has shown there is a culture of greed in the Liberal Party," thundered Jack Layton, leader of the opposition New Democratic Party.

The long-awaited finding leaves the prime minister personally unscathed, but it delivers a blow to his party as it prepares for national elections, now likely to be held in February.

The report's release also led to the unusual spectacle of the current and former prime ministers holding successive news conferences. Martin said he was "obviously pleased" at having been absolved in his actions as Chretien's finance minister. Chretien, who was prime minister for a decade until December 2003, angrily rebutted the report and said he would go to federal court to clear his name.

At his spirited news conference, Chretien said the inquiry commission chairman, retired justice John Gomery, "chose to ignore or distort the clear evidence."

In a dramatic performance, Chretien hinted that Martin was equally responsible for the scandal, and he defended his refusal to join President Bush in the Iraq war, saying that otherwise, "We would be dealing with the body bags coming back to Canada of young boys being killed in Iraq."

Chretien blamed those around him who "betrayed their country, their party and . . . betrayed me." He added, "I will not accept the blame for something that is not true."

The inquiry included nine months of public hearings that sometimes transfixed the country. The report concluded that a government-funded advertising campaign, aimed at selling federalism to succession-leaning Quebecers in the late 1990s, spawned kickbacks, payoffs, padded payrolls, politically steered contracts and the laundering of political contributions to the Liberal Party.

Gomery said the system was controlled by aides and close friends of Chretien. He said there was no evidence Chretien was aware of kickbacks but said he was "directly responsible for errors" that led to the wrongdoing.

The Liberal Party, already governing with a minority in Parliament, is worried the inquiry will lead to losses in Quebec and further reduce the party's power in Parliament. Its opponents held out the possibility of forcing an election before Christmas.

Prime Minister Paul Martin was absolved of wrongdoing by a government inquiry on a money scandal involving his Liberal Party.