The Australian newspaper has called Winston Peters' appointment as Foreign Minister a "bad joke", but other early reaction from overseas media is more muted.
The Australian's website also carried a cartoon featuring Mr Peters jumping in the air, saying "I'm Foreign Minister" while Prime Minister Helen Clark mouths "It's to keep him out of the country".
The paper said Helen Clark had cobbled together a "bizarre" minority government with Mr Peters in an "absurd position" of not being in Cabinet and being able to criticise or vote against government policies outside his portfolio.
Mr Peters' position as Foreign Minister outside Cabinet captured widespread attention in the Australian media -- as well as farther afield.
The website of Qatar-based satellite television service Aljazeera said Mr Peters was well known for his anti-migrant and protectionist policies.
In its report sourced from news agencies, Aljazeera noted that Mr Peters had said a government campaign to attract more migrants last year would drag New Zealand into the "status of an Asian colony" and that during the election campaign he said an extremist Muslim "militant underbelly" was being allowed into the country.
The BBC's website described Mr Peters as the "leader of the anti-immigration, nationalist New Zealand First Party".
Melbourne's Herald Sun carried the headline "Maverick wins key post", over an Australian Associated Press report saying Helen Clark had held on to power by clinching a deal with Mr Peters.
It said he had mounted often virulent attacks on immigration, especially by Asians and Muslims.
Australia's Special Broadcasting Service, which provides programmes for the country's ethnic communities, also carried AAP's report on its website under the headline "NZ: controversial appointment".
Back home, Act MP Heather Roy said putting Mr Peters in the foreign affairs role was "an insult to New Zealand's friends overseas".
She said: "Winston Peters has done more to undermine New Zealand's international reputation than any other member of Parliament.
"His comments on race and immigration make him unsuitable for the foreign affairs portfolio, and risk being seen as an outright insult, especially in Asia."
Representatives of Asians and Muslims in New Zealand gave a cool response to the appointment.
Federation of Islamic Associations in New Zealand president Javed Khan said Mr Peters in the past had been fairly irresponsible in his strident views against immigrants and Muslims.
"Maybe after getting this portfolio, he would be much more restrained within the parameters established by the Labour Government."
Mr Khan agreed Mr Peters should tone down his rhetoric and be more accommodating in his stance.
New Zealand Malaysia Business Council chairman John Wong said Mr Peters' appointment was an insult to New Zealand because his policies and positions have not been immigrant-friendly.
Mr Wong said: "His anti-immigrant image is definitely not good for the country."
Potential migrants from Asia would now go to Australia and Canada, Mr Wong said. "I do not see how he can contribute to the country as foreign minister."
- NZPA
Mixed overseas reaction to Peters' appointment
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