Adjourning the legislature will allow for a "cooling off period" and give the Liberals time to negotiate with unions and the opposition parties on a wage freeze for nearly 500,000 public sector workers, Mr. McGuinty said on Monday.
"We're going to make a sincere and determined effort to sit down with our labour partners and see if we can negotiate wage freeze agreements," he said.
The Progressive Conservatives and NDP complained there was no need for Mr. McGuinty to prorogue the legislature, effectively killing finance committee hearings into a contempt motion the Liberals faced over two cancelled gas plants in Oakville and Mississauga.
"We just can't simply close the doors and lock them up at such a crucial point in our history," said opposition Leader Tim Hudak.
"I do hope that the Liberal party decision makers will take the premier's comments to heart and recognize the need to move quickly (on their leadership convention)."
Mr. McGuinty said he will stay on until the Liberals elect a new leader, adding the timing of the recall of the legislature would have to wait until then.
"I want my successor to make that decision," he said.
The Tories and New Democrats said they intend to keep pursuing the true costs of the cancelled energy projects, which the Liberals say is $230 million but the Tories and New Democrats estimate is closer to $650 million.
"The fact is there's important work that we need to do here in the legislature, and that work shouldn't stop while the Liberal party focuses on their leadership race," said NDP Leader Andrea Horwath.
The premier said he would also stay on as the MPP for Ottawa-South until the next election, but did not rule out taking a run for the leadership of the federal Liberals.
"I am not making any plans whatsoever beyond my duties here at Queen's Park," Mr. McGuinty told reporters.
There's no obvious successor to Mr. McGuinty, but names often spoken of as potential leadership candidates include Housing Minister Kathleen Wynne, Finance Minister Dwight Duncan and Energy Minister Chris Bentley, who has been the focus of the opposition attacks and original contempt motion over the cancelled gas plants.
He says there was little hope of getting the public sector wage freeze the minority government needs to trim the $14.4-billion deficit because the opposition parties are opposed, so he adjourned the legislature to allow time for negotiations.
Mr. McGuinty also says after 16 years as Liberal leader and the past nine as premier, it's time for new blood to take over.
He told the caucus the Liberals have made some mistakes in government, but got the big things right in education, health care and the environment.
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