The trend towards ever larger telescopes and more advanced adaptive optics systems is driving the need for deformable mirrors with a large number of low cost actuators. Liquid mirrors have long been recognized a potential low cost alternative to conventional solid mirrors. By using a water or oil based ferrofluid we are able to benefit from a stronger magnetic response than is found in magnetic liquid metal amalgams and avoid the difficulty of passing a uniform current through a liquid. Depositing a thin silver colloid known as a metal liquid-like film (MELLF) on the ferrofluid surface solves the problem of low reflectivity of pure ferrofluids. This combination provides a liquid optical surface that can be precisely shaped in a magnetic field. We present experimental results obtained with a prototype deformable liquid mirror based on this combination.