Coalition talks in chaos as Nats accuse Clark of failure

Helen Clark said through a spokesperson that Labour was continuing to negotiate with the Greens, NZ First, United Future and the Maori Party 'in good faith'. Picture / Glenn Jeffrey

Coalition negotiations were in turmoil yesterday with two of National's supposed allies contradicting its claim that it was poised to form an alternative Government.

"The situation is that both major parties can at this stage rely on 57 votes," National Party deputy leader Gerry Brownlee told the Herald on Sunday.

Such a scenario would see National form a bloc with United Future, the Maori Party and Act, with NZ First as the kingmaker.

NZ First leader Winston Peters will today be considering "a very brief letter" sent to his officeby National last Friday night, apparently suggesting National had the numbers to form a government with NZ First's support.

But the Maori Party and United Future have denied guaranteeing any such support.

While Mr Brownlee claims Helen Clark has "completely failed" to seal a deal, Ms Clark dismissed his claims yesterday as "bluster and bravado".

She said through a spokesperson that Labour was continuing to negotiate with the Greens, NZ First, United Future and the Maori Party "in good faith" and the proposal from National to Mr Peters was "spoiling tactics".

Much of the speculation was sparked by a clandestine meeting between Don Brash, Winston Peters, Peter Dunne and Tariana Turia last Tuesday.

But Maori Party co-leader Tariana Turia strenuously denied any arrangement had been brokered with National.

And co-leader Pita Sharples insisted last Thursday that the party was still open to supporting Labour on confidence and supply in return for policy concessions.

United Future leader Peter Dunne said his party was negotiating in good faith with Labour and would not be talking with National on the same basis unless Labour was finally unable to form a government.

"We haven't reached that point yet and [National] knows that. It is not the simple truth to say National has 57 votes locked up," he said.

Act leader Rodney Hide refused to comment on whether his party had formally offered support to National. He would only say he still believed National could put a government together.

Mr Peters yesterday refused to discuss talks with Labour or to say whether an acceptable offer was on the table.

"I can't do that because it's not my decision ... this party is not based on one person. It's based on thousands of people who are members and a board and a caucus," he said.

But sources close to NZ First said Mr Peters was leaning towards Labour and there was a "very strong chance" a deal could be signed in the next week. Last Friday, Mr Peters had a two-hour meeting with Labour deputy leader Michael Cullen and chief of staff Heather Simpson, while the Greens and Labour met at a staff level.

Labour is believed to have offered Mr Peters a ministerial post outside cabinet, something he had been reluctant to accept.

Despite pre-election declarations from Mr Peters that NZ First would sit on the cross-benches and not enter formal coalition with either Labour or National, the caucus is understood to now favour an arrangement that would give them oversight on key policies, such as raising the superannuation rate and increasing the number of police.

Meanwhile, Green Party co-leader Rod Donald was yesterday optimistic an agreement would be reached with Labour "in the next few days".