Clark cobbles together her third Government

Helen Clark has announced the lineup to her third government. Ross Land / Getty Images

Helen Clark has cobbled together her third government by giving New Zealand First and United Future two ministerial positions, but leaving the Greens mostly out in the cold.

NZ First leader Winston Peters will hold the foreign affairs, racing and associate senior citizens portfolios.

United Future leader Peter Dunne gains the revenue and associate health positions.

Both positions will be outside of Cabinet allowing them to disagree with the Government on issues outside of their portfolio areas.

They also both get a number of policy concessions including a small rise in superannuation, more police and policy reviews.

The arrangements leave the Greens shut out of formal government, but in exchange for abstaining on crucial confidence votes they get a "co-operation agreement".

This will include the Green leaders getting to work on certain policy areas and even holding the role as spokespeople for the Government on energy efficiency, solar programmes and a "Buy Kiwi Made" programme.

Miss Clark said the Greens had been vetoed by the other minor parties from gaining Cabinet positions and she had to deal with the way the numbers fell in a "fractured" parliament.

Labour will have its 50 MPs and will be in coalition with the sole Progressive MP Jim Anderton. NZ First will give Miss Clark seven votes and United Future three.

This is a majority of 61 in the 121 seat Parliament for confidence and supply votes such as the budget.

The Greens six MPs will abstain and the Maori Party said it would be an "independent" voice choosing how to vote on a case by case basis.

National 48 MPs and ACT's two MPs will comprise the formal opposition.

Mr Peters said he had decided to remain out of coalition government, but give support on crucial votes because of the need to provide durable and stable government.

Mr Peters said this was not a broad breach of his election campaign position, but he had to give Labour full support on confidence votes to avoid a potential "Mexican stand-off" in Parliament.

His decision to take a ministerial position has already angered many in his party with party president Doug Woolerton yesterday quitting that post but staying on as an MP.

Miss Clark also defended Mr Peters saying he had provided "leadership" to provide stability.

She envisaged working very closely with Mr Peters in the foreign affairs portfolio to see that it was strongly represented in Cabinet.

Mr Dunne said he had decided to form the agreement and take the ministerial position because United Future could get more of its policies implemented that way.

Miss Clark conceded it was a new experience to have the important foreign affairs portfolio held by a minister outside of Cabinet.

It also new ground to have Green MPs not voting for the government, but then speaking for it on some issues.

She described it as part of a "learning curve" under MMP.

The Greens were furious today after the talks ended with them not getting the ministerial positions they had been negotiating towards.

Green co-leader Jeanette Fitzsimons said Mr Dunne and Mr Peters had held Labour to ransom.

"We do not believe such a government is in New Zealand's best interests and therefore cannot in all conscience, actively provide support," Ms Fitzsimons said.

Her fellow co-leader Rod Donald was also scathing.

"Many of the policy and budgetary demands that Labour has accepted from NZ First and United Future are socially, economically or environmentally destructive," Mr Donald said.

Miss Clark said it was a "reality" of the cards dealt by voters one month and two days ago on election day, that she could not deliver a guaranteed stable government with the Greens inside it.

- NZPA