New Zealand coalition talks intensify as final tally confirms political deadlock

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A possible Labour-Green coalition is on the cards in New Zealand after the gap narrowed with the ruling National Party in the final election tally.

The leaders of the National, Labour and Green parties are all due to make statements before 3.30pm this afternoon, but no word has emerged yet from the camp of the so-called "king" or "queen-maker" Winston Peters, leader of the New Zealand First party, whose election night tally remains at nine seats and gives him the balance of power.

"Today's result lifts Labour's final vote to 37 per cent, and the left block of seats to 54".

Neither the National party, led by a revitalised Bill English, nor the Labour party, led by Jacinda Ardern, have been in a position to take office after the 23 September election ended in a stalemate.

Peters, a former National MP, has formed governments both with the National and Labour parties in the past.

But Mr English's main challenger, Labour's Jacinda Ardern, could still form government.

New Zealand's two main parties prepared on Saturday to intensify negotiations with kingmaker MP Winston Peters after the counting of postal and overseas votes from last month's general election failed to break a two-week political deadlock.

The center-right National Party, led by Prime Minister Bill English, has governed since 2008 in a minority government with confidence and supply from the Maori, ACT and United Future parties.

"This now means that we have a strengthened mandate to negotiate and form a durable, stable coalition government".

Greens leader James Shaw said his party wanted to be at the heart of a three-way coalition and he had a "polite and cordial relationship" with Peters.

"I don't think it weakens it significantly at all", referring to National's negotiating position. The combination would form a new government with a three-seat parliamentary majority.

Peters has said he will make a final decision by October 12. Those came at the expense of the National Party, which lost two seats.

Ardern has said Labour and NZ First have many "shared values" which include exploring a manned re-entry of the Pike river mine, increasing the minimum wage, improving the education system, and a desire to address the housing crisis.

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