Now they're talking

By VERNON SMALL deputy political editor

Helen Clark will try to persuade both the Greens and United Future to prop up her minority Government rather than be hostage to the demands of a single partner.

Serious talks will begin this week after Saturday's general election gave Labour a second term with 52 seats in the 120-seat Parliament.

Ally Jim Anderton's Progressive Coalition won two seats.

That leaves Helen Clark needing the support of the Greens, with eight seats, or Peter Dunne's United Future, with nine MPs, to win confidence motions in Parliament.

The National Party was devastated at the election, losing 12 of its 39 MPs to record its worst result in its 66-year history.

The Prime Minister spoke to Green co-leader Jeanette Fitzsimons on Saturday night and was assured of Green support in forming a Government.

But she left it until yesterday to talk to Mr Dunne.

Helen Clark has rejected any suggestion of an arrangement with her third alternative - Winston Peters' New Zealand First, with 13 MPs.

Initially, it seemed that Helen Clark was looking at building a confidence and money supply arrangement solely with the Greens.

But yesterday she did not rule out giving her Administration the buffer of having two parties on board, a sensible precaution given the Greens' threat to bring down the Government over the GM moratorium when it expires in October next year.

But while the Prime Minister is trying to keep all her options open, the Greens are insisting on hammering out a deal without United Future before committing to support her long term.

"We will be looking for some kind of indication over the next couple of weeks about what Labour is going to do about [the moratorium]," Ms Fitzsimons said.

"I don't think they can just kind of let things hang until October next year.

"I think Labour supporters would punish it pretty badly if they were to go with a party of the right when there was another option available to them."

She said a lot of Labour supporters wanted an extension of the moratorium.

Helen Clark has said a minority Government is her preference, but the Greens are leaving open the possibility of a coalition despite the standoff over GM.

Co-leader Rod Donald said of Labour: "They're not our friends" because of attacks during the campaign.

But it was in the interests of the country to work with Labour, he said.

"The ideal is to reach an agreement at the outset, and that could include all options. The commitments we made before the election were on the basis of a centre-left Government - of the Greens working with or within such a Government."

He said his own party's result, adding one seat to its existing seven, was a real victory in the face of Labour's anti-Green campaign.

"The harsh reality is that the Labour-led Coalition has shrunk from 59 seats to 54 as a result of Helen Clark calling a snap election."

Mr Dunne said United Future wanted a role in Government and a written agreement to ensure it was not taken for granted or ambushed. United Future would not feel obliged to back a minority Government if Labour turned to the Greens for support.

But he pointed out that Labour's 52 seats and his nine would be enough for a two-party Government.

Mr Dunne said of yesterday's telephone call from Helen Clark: "It was a very brief conversation, really an overview of what happened. It would be wrong to say there was detailed business."

He said they would meet today for preliminary discussions.

The tough talk from the Greens and United Future is seen as positioning ahead of the serious negotiations likely to start after caucus meetings of the Greens and United Future tomorrow where MPs will discuss their wish lists.

Minor parties have their strongest cards to play at this stage, before they are tied into agreements by the bigger party.

Helen Clark, who hopes to wrap up a deal on confidence and money supply in two weeks, said she took the Greens' assurance of support for her to form a Government as an undertaking to vote for the first confidence motion.

That will come with the speech from the throne, which sets out the Government's programme.

Parliament must meet by September 25.

Helen Clark has said Mr Anderton will not be reappointed Deputy Prime Minister. That job is likely to go to the deputy Labour leader, Finance Minister Michael Cullen.

Mr Anderton will stay in the Cabinet, but his Progressive Coalition colleague Matt Robson is likely to move to the back benches.

Meanwhile, Mr Peters, who will have the third-biggest party in the House, warned Labour not to use him as a prop.

He said Labour's rejection of his party was "betrayal" after it had sought his co-operation for the past 2 1/2 years.

Helen Clark said, "Shucks," when asked to comment on Mr Peters' concerns.

She said he had campaigned by setting New Zealanders against one another.

"[It ] is thoroughly reprehensible and I am not going to tolerate it."

In other developments, outgoing Alliance MP and Mana Motuhake leader Willie Jackson says he is pondering a future under a new Maori party banner.

Mr Jackson lost the race against Labour's Nanaia Mahuta for the Tainui seat.

Alliance leader Laila Harre failed to win the Waitakere seat and her party has been wiped out as a force in Parliament after winning just 1.24 per cent of the party vote nationwide.

She would not say unequivocally whether she would stay on as Alliance leader but was confident her leadership was not under threat.

Ousted Act MP Owen Jennings says Richard Prebble might need to be replaced as leader if the party is to broaden its appeal. Act's election-night result of nine seats was the same as in 1999.

Mr Jennings, who was pushed down the party's list, is out of Parliament.

Last night he said Mr Prebble was, and always would be, linked to the Rogernomics policies of the 1980s and Act needed to move on.

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