Labour leader Helen Clark says it could take some time to form a government and she is keeping all her options open.
Helen Clark told journalists today contact had been made with all parties - with the exception of National and Act - to start talks on how a government might be formed.
On election night results Labour was the largest party, with 50 seats compared to National's 49, but the final result will not be known for a fortnight with 200,000 special votes still to come.
National Party leader Don Brash is refusing to throw in the towel, with just 23,000 votes and a single seat separating the party from Labour.
Both Labour and National are now working to stitch together a workable coalition. Helen Clark will need support from Jim Anderton, the Greens with their six seats and United Future's three MPs plus support on supply and confidence votes from either New Zealand First or the Maori Party to form a coalition government.
Dr Brash said a preferable scenario for National would be for it, or a potential support party like NZ First or United Future, to win an extra seat on special votes.
If that extra seat came from Labour, it would leave centre-right parties in a position to form a government without Maori Party support.
Dr Brash refused to say if National was prepared to ditch its plan to scrap the Maori seats - a policy which ignited considerable Maori Party anger during the campaign - to accommodate the Maori Party
The result of special votes will not be known for up to two weeks, but they traditionally favour centre-left parties.
Dr Brash said he had spoken to United Future leader Peter Dunne and Act leader Rodney Hide today and congratulated them.
Their conversations had been "cordial", but there had been no discussion of potential deals.
Dr Brash also intended to speak to and congratulate NZ First leader Winston Peters and Maori Party co-leader Tariana Turia. He did not intend to discuss potential deals with them today.
Dr Brash was meeting with senior party spokespeople at his Auckland home today and planned to fly down to Wellington tomorrow.
National will hold the first meeting of its new-look caucus in Wellington on Tuesday.
Helen Clark said she would work patiently with all her potential allies.
"I have started myself speaking to leaders of parties which it might be possible to work with.
"I think this is going to take quite some time to work through simply because the writs (final results) won't be until two Fridays' time," Helen Clark said.
"There are more parties to be talking with than has been the case after each of the last two elections.
Don Brash said there has been a big swing to National in the main polls and he believes it is not inconceivable that that could be true of the specials as well. Dr Brash said in that case, it could put National slightly ahead of Labour or could take the Greens out of contention, making them fall below the five per cent threshold.
"The second issue, of course is whether either political party can form a stable coalition and yes, there are challenges for the National Party in doing that, but my word, there are some pretty important challenges for Labour as well. United Future, for example, has made it pretty clear that they will not support a government where the Greens are in Cabinet."
Helen Clark will return to Wellington tomorrow and, after meeting her ministers in the morning, will start a round of talks with the leaders of the Greens, United Future, New Zealand First and the Maori Party.
She has talked about her desire to run another minority government, along with Jim Anderton, with other parties offering support on important votes or on certain issues.
The election had divided New Zealanders and Helen Clark said she wanted as much broad-based parliamentary support as possible.
"That is my instinct, to go for an arrangement which is broad and inclusive as possible," she said.
"I think that's what voters always hoped for from MMP. I don't think voters expect the people they elect to be running back to the polls because the going wasn't as easy as it might have been."
Helen Clark said there was too much emphasis on coalitions under MMP and she was not ruling any arrangements in or out.
She did not believe the counting of more than 200,000 special votes would have much effect on the outcome.
"Specials aren't what they used to be, because these specials include, as I understand it, the late enrolments ... so there's those, those cast out of electorates and of course overseas.
"Last time the difference between the on-the-night tally and the final tally related to Labour was 0.1 of a per cent."
There was some speculation that the specials could see National lose one MP and the Greens gain one more, she said
If the results did not change dramatically then Helen Clark believed the preliminary talks could see a government formed shortly after the final result was known.
POSSIBLE COALITION PARTIES
New Zealand First: Deputy leader Peter Brown is confident Winston Peters will stick to his promise of sitting on the cross benches while supporting the party with the largest number of seats in Parliament. Mr Peters has not conceded defeat to Bob Clarkson, who has a margin of 568 in the Tauranga seat.
United Future: Leader Peter Dunne believes the smaller parties, including his, have been squeezed out by the two main parties.
"I think it's just waiting to see how things pan out in the next few weeks and over the next three years, building on the strong messages we've got and making sure that the audiences they're aimed at, hear them."
Mr Dunne said United Future has some bottom-line policies it is not prepare to compromise on.
"With the prospect of Labour leading the next government, they're a little easier to accommodate - no change to the Families Commission, no change in the legal status of cannabis and no hate speech law."
Mr Dunne said another issue United Future has made clear, is that it will not support a government that supports the Greens in Cabinet, because he believes the Greens' policies are so far removed from the mainstream of New Zealand society, that they are "dangerous".
"I think they're Luddite in terms of their transport and energy policies. I think their foreign policy verges on being in favour of terrorism and they have never yet found a drug they're not in favour of."
Green Party: Co-leader Rod Donald said he is flabbergasted by United Future leader Peter Dunne's assertions. He said surely, this is a time to work together.
Mr Donald said the Greens' objective is to ensure there is a strong, stable government that implements some of the party's policies including energy security, protecting the environment, a fair society, healthy food and people.
Maori Party: The Maori Party's four MPs met at an Auckland marae today to talk coalition options - but admitted a deal with National was unlikely.
Maori Party co-leader Pita Sharples said the party was willing to talk with either National or Labour and had arranged talks with the Labour party tomorrow afternoon. Unless National moved on its one law for all policy there was no chance of a coalition with his party, Dr Sharples said.
Leader Tariana Turia said she is excited by her party's gaining of four seats. She believes people are looking for a new way forward.
"They want politicians who actually do have respect for diversity, who want unity in this land and we certainly do. We're very conscious of the fact that New Zealand is browning up - 56 per cent of all children under five years of age are of Maori descent and we've got to prepare a future where our kids can all walk together into the future, not having to look sideways at one another, because Maori are going to be the mainstream."
Ms Turia said the Maori Party wants to ensure the Maori seats are not scrapped.
- NEWSTALK ZB and NZPA
Clark says forming a government could take time
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