TORONTO - The controversial topic of public funding for Catholic schools re-emerged Saturday at the first debate between candidates vying to become leader of Ontario's New Democrats, along with warnings about focusing on issues that could divide the third-placed party as it attempts to rebuild itself.

Three of the four leadership contenders tried to distance themselves from the proposal that helped sink the Progressive Conservatives in the last provincial election, saying the party needs to focus on the issues that unite and strengthen it.

"The next election needs to be fought on the economy, on the environment and rebuilding equity and fairness to this province," Peter Tabuns, former head of Greenpeace Canada, told a gathering of more than 200 supporters.

"We looked at what happened in the last election when (Progressive Conservative Leader) John Tory rolled his party over a cliff on the faith-based funding issue. The simple reality in this province is that when you take on those issues, it means everything else gets cleared off the table."

Michael Prue, who got into hot water earlier this year by suggesting it's time the NDP reviewed its policy of supporting public funding for Catholic schools, refused to back away from the issue, saying party members have the right to debate any topic they wish.

"(In) the last four conventions this issue has been on the convention floor and (in) the last four conventions the party brass has refused to allow it to come forward -- that is not democracy," said Prue, a former East York mayor.

"All I'm saying to this party is that if the members want to discuss this issue, then the members should have the right to put it on the convention floor and to vote on it."

Tory spent much of the 2007 election campaign defending a proposal to give $400 million a year to religious schools which opt into the public system. But the fierce debate that ensued eroded Tory's public support and left him without a seat in the legislature.

Prue has maintained he isn't trying to re-open that debate and said that Tory took on the issue "on the wrong side" by seeking to extend funding.

"I haven't heard anyone in the New Democratic party wanting to go down this route, but we have to determine if the current system is against the United Nations charter of which we are a signatory nation."

But party veteran Gilles Bisson was one of three contenders who warned faith-based funding was an issue that would divide the party.

"It is really the third rail of politics; the Liberals would love nothing better," Bisson said.

"We need to focus on those issues that bind us together and that are dealing with the issues of today, such as the environment and the economy."

When it comes to the province's finances, Bisson said, he believes it's research and innovation that will create jobs, while Prue argued his track record balancing the books as mayor during a recession shows he can tackle the economy.

Tabuns said the way to help the struggling auto sector is by linking the environment and the economy, while Hamilton's Andrea Horwath, who entered the race Friday, said she wants to remove barriers for unions to organize and improve jobs.

All four candidates agree, however, that rebuilding the party leading to the next provincial election in 2011 will be a key priority.

"If we are going to win the next provincial election, we're only going to do it if we are organized," said Horwath, who has a background as a grassroots organizer.

"I have experience there."

The NDP hasn't been the ruling party in Ontario since former premier Bob Rae took the reins in 1990. Rae presided over one of the most challenging periods of the province's history, inheriting a $700-million deficit and at one point projecting a record deficit of $9.1 billion.

The Ontario NDP is sponsoring nine regional debates in advance of the leadership convention in March to replace outgoing Leader Howard Hampton, who will step down after 13 years at the helm.

The candidates will travel to Sudbury, Kingston, London, Ottawa, Timmins, Hamilton and Thunder Bay.