12.15pm UPDATE
New Zealanders will go to the polls on Saturday July 27.
Prime Minister Helen Clark announced the date at a midday news conference following caucus.
The date had been seen as the earliest possible time for a vote, and comes two and a half months before the end of the Government's three-year term.
Miss Clark told a packed news conference that problems with Labour's junior coalition partner, the Alliance, had brought it to "breaking point". The two factions of the Alliance would contest the election as two parties.
"While this change has not affected the functioning of the Government, it is now undoubtedly having an impact on our ability to progress our programme in Parliament."
The Prime Minister said "time wasting" by the Opposition would obstruct the passage of legislation, and there was no point in having Parliament continue to sit for another two months.
"In my view, the will of the majority of New Zealanders is now being thwarted, and I intend to put that to the test."
She also referred to increasing calls from business and the public to end speculation over the election date so a sense of stability could be restored.
She said she was seeking a "new mandate" to form and lead a strong government.
"I do not believe that it is acceptable to New Zealanders to see small parties exercise a balance of power irresponsibly," she said.
She credited former Alliance Party leader Jim Anderton for the "emphasis he has placed on steady government" and said she looked forward "to working with him again".
She had delayed the announcement for a number of reasons. She wanted there to be time for the voter enrolment campaign to get under way as it did a month ago. It was also important for the Government to announce its Budget, which it did last month.
Parliament will be dissolved on June 18.
National leader Bill English said on National Radio that Miss Clark had called a "snap election" in panic and her reasons for going to the polls were "rubbish".
However, Mr English said he was looking forward to the campaign as he had been getting to good reception around the country to National's debating of serious issues.
He also said Miss Clark could not have it both ways -- claiming to be in control but calling a snap election.
Feature: Election 2002
Election links
Election on July 27th
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