The departure of Ross Meurant, parliamentary under-secretary for agriculture and forestry, deprives the conservative National Party government of its single-seat majority in parliament.
Mr Meurant said that as leader of the new Right Of Centre (ROC) party, he would retain his responsibilities outside the cabinet and support the government until the next election, due in 1996. 'I am no longer a member of the National Party,' he announced. 'I am part of the government as a coalition partner.' He said that he had reached an agreement with the Prime Minister, Jim Bolger, to this effect.
It was the first move in an important shake-up of New Zealand's political scene. The next election will be fought under a new voting system of proportional representation that will end the 56-year-long hold on power of the National and Labour parties. The system will give minority parties more seats and make coalition governments inevitable.
Mr Meurant said that he had acted because the National Party had lost 60 per cent of its membership in the last year and could not retain power without a right-wing partner. He predicted the ROC could win up to 15 seats at the next election. He said the ROC would support National Party policies but would aim to restore a 'social conscience' to the government, by abolishing a surtax on pensions.
The party would reject a proposed dollars NZ1bn ( pounds 400m) settlement for Maori land claims. Mr Meurant is also known to oppose Mr Bolger's proposal to get rid of the monarchy in favour of a republic.
More new parties are expected to be formed in the next few months, with further defections from the Nationals and the main opposition Labour Party, as members of parliament position themselves for a place in the new political spectrum.
Many MPs will lose their seats under the new system. This will reduce the number of constituencies from 99 to 65. The balance of the new parliament will be made up by MPs nominated by their parties on a party list.
Mr Bolger has an effective majority of two, after appointing a Labour MP as Speaker. But he claims to be relaxed about the situation. 'All MPs are considering their future,' he said last week. 'Coalition politics is inevitable. We shouldn't fear that. A coalition of compatible parties with common policies will work.'
Mr Meurant, 47, a former police inspector, gained a reputation as a right-winger when he commanded a riot squad, protecting the South African rugby team on its controversial tour of New Zealand in 1981.
He has no other MPs in his party but claims that a dozen National Party executives will join him. He denied the ROC would be 'a poodle' of the National government and said it would develop independent policies.