New Zealand premier starts post-election coalition talks

Nov 28, 2011, 5:28 GMT

Wellington - New Zealand Prime Minister John Key started negotiations with potential coalition partners Monday after his conservative National Party was returned to power but denied an overall majority in the weekend's general election.

Key said the party caucus of 60 members in the 121-seat parliament would meet Tuesday and more coalition talks would be scheduled but no arrangements had been made.

Key held the final cabinet meeting of his former administration Monday and has said he plans to reshuffle his ministerial line-up after completing coalition negotiations.

His first meetings were with the lone representatives of the free market ACT party, John Banks, and the centrist United Future, Peter Dunne, elected on Saturday.

Both parties were partners in Key's minority government that ruled from 2008 after National defeated the Labour Party, which had governed for nine years, and Banks and Dunne are assured of ministerial posts outside cabinet. Commentators said deals were expected to be signed before the end of the week.

Key later met representatives of the Maori Party, which also supported his former administration, with its co-leaders holding non-cabinet portfolios relating to Maori affairs.

The Maori Party opposes Key's plan to sell chunks of four state-owned power companies and Air New Zealand and was expected to insist that asset sales be excluded from any political pact.

Although the votes of Banks and Dunne would give Key a majority in the House of Representatives, he has said he would like to have the Maori Party on board in the interests of national unity.

The parliamentary caucus of the main opposition Labour Party, which lost eight seats in its worst electoral performance, would meet Tuesday. Phil Goff was expected to resign as party leader but has said he would remain in parliament until 2014.