NZ parties haggle over poll spoils

Winston Peters, who will decide New Zealand's next government after Saturday's inconclusive election, went to sea yesterday, keeping everyone guessing. Mr Peters, leader of the nationalist New Zealand First party, which holds the balance of power, took advisers sailing to discuss coalition strategy out of the spotlight.

His 17 MPs in the 120-seat Parliament meet tomorrow to discuss separate coalition talks with the conservative National Party and the Labour Party. Mr Peters, in line for the Deputy Prime Minister's post whoever he joins, said it could take weeks to negotiate a deal.

Neither National (44) nor Labour (37) won enough seats to govern alone in the first election held under the Mixed Member Proportional (MMP) system. Labour has ruled out joining a grand coalition with the National Party.

Both Jim Bolger, the National leader and Prime Minister for the past six years, and the Labour leader, Helen Clark, said they were in the best position to form the next government, while acknowledging they would need NZ First's help.

Jim Anderton, leader of the NZ Alliance, which won 13 seats, said he would support Labour, while not joining a formal coalition, if it accepted certain Alliance policies.

Richard Prebble, head of the right-wing ACT NZ party, said his eight MPs would back the Nationals. He said Mr Bolger, who is also backed by a lone United NZ party MP, could lead a minority government for the next three years.

While Mr Anderton and Ms Clark, who could be the first woman prime minister of the first country to give women the vote, in 1893, spoke by phone and Mr Bolger had a discussion with Mr Prebble, Mr Peters was playing hard to get.

Negotiations will be made more difficult by the fact that 230,000 absentee votes, about 10 per cent of the total, remain to be counted. The final tally, which will not be known for two weeks, could affect the outcome of at least five seats.

While Mr Peters has not ruled out a coalition with the Nationals, most believe he is more likely to go with Labour but he will conduct a bidding war, extracting the best deal he can for the party that campaigned on the theme "New Zealand for New Zealanders". This will include a cut in immigration and a clamp on foreign investment.