Mr Martin has promised an inquiry

An Ipsos-Reid poll for the Toronto Globe and Mail and CTV News showed support had dropped from 48% to 39%.

"Outside of an election period I've never seen numbers move like this," said Darrell Bricker of Ipsos-Reid.

A report on Tuesday revealed the government mishandled millions of dollars of state advertising money.

Auditor-General Sheila Fraser said much of what she found was a "shocking" waste of Canadian taxpayers' cash.

Prime Minister Paul Martin - who was finance minister at the time the alleged abuses took place - has promised an inquiry. He insists he was unaware of the fraud taking place.

According to the poll - which was carried out over three days starting the day the report was published - support for the government has dropped in nearly every region in Canada.

"This one is like a wildfire. It's out of control and everything the prime minister has done at this point has just blown the flames higher," Mr Bricker told the Globe and Mail.

May elections

Until a week ago, aides to Mr Martin - who succeeded the long-serving premier Jean Chretien in December 2003 - were talking of elections in May to take advantage of the party's popularity.

Correspondents say this looks less certain if the slump in support continues.

I am deeply disturbed such practices were allowed to happen Sheila Fraser

Tuesday's report was long awaited and its conclusions were more or less anticipated, said the BBC's Lee Carter in Toronto.

Between 1997 and 2001, up to C$250m ($188m) went to a project designed to promote national unity in Canada.

This followed a 1995 referendum where the primarily French-speaking province of Quebec voted by only the thinnest of margins to stay in Canada.

At least half the money was siphoned off by Quebec advertising and communication agencies with ties to the Liberal Party.

Mrs Fraser said that many of the transactions involved false invoices or contracts, or no contracts at all.

She called the practices a blatant misuse of public funds and said she found them shocking and completely unacceptable.

"I am deeply disturbed such practices were allowed to happen," she said.