Lyndsay Freer was sitting in St Peter's Square in Vatican City when she saw white smoke rise into the air.
"The whole square erupted with joy," the New Zealand Catholic Church spokeswoman said.
The white smoke indicated a choice had been made -- Cardinal Joseph Ratzinger of Germany, who had chosen Pope Benedict XVI as his papal name.
"I was in a covered area just below the balcony from where the announcement was made," Mrs Freer said.
She said the atmosphere was carnival-like and celebrations were continuing into the night.
"I was very much part of it all, and was quite close to the new pope when he came out on to the balcony."
As Mrs Freer left St Peter's Square after the announcement for an evening meal break, the party was continuing.
"People were still arriving into the square even though all the news is well past -- it's really amazing."
Her first reaction to the selection of Cardinal Ratzinger was "a little surprised".
"He's 78, he's the oldest cardinal to be elected in 100 years...and he's regarded as a very conservative man.
"However, it's quite clear this is a transitional papacy, perhaps a holding operation -- he spoke about how he was very close to Pope John Paul, so clearly there will be continuation of the types of policy John Paul had."
Mrs Freer said she "didn't have the luxury" to reveal who had been her personal favourite for pope.
She said she hoped the pastoral aspect of the German pope's work would be more pronounced than the theological input he had had into the church in recent years.
"Every Catholic will have their own opinion, but at the end of the day that doesn't matter, the cardinals in their own wisdom decide," she said.
"We'll have to wait and see, he's not a young man, but he's a man of great integrity and great intellect."
Mrs Freer said she was unsure whether the new pope had ever visited New Zealand.
The New Zealand Government sent its congratulations.
Deputy Prime Minister Dr Michael Cullen said in a statement: "The New Zealand Government wishes the new pontiff well in the immense responsibilities he is about to assume on behalf of Roman Catholics round the world."
In Auckland, Bishop Patrick Dunn said Cardinal Ratzinger "may well be an inspired choice" aimed at addressing the challenges facing the Church in the First World.
While the new pope was a close confidant, supporter and friend of his predecessor, Bishop Dunn believed he would be his own man.
"Even the name he has chosen -- he's not John Paul III -- he's chosen the name Benedict, and Benedict in Catholic spirituality is the patron saint of western Europe," he told National Radio.
"So I think the cardinals in conclave have decided to choose a pope who they hope will be able to speak with clarity to the heart of western Europe, really to the heart of the First World."
The fact that the recent growth of the Church was in the Third World and in developing countries, rather than in western Europe, was the point, Bishop Dunn said.
"They could have chosen someone from South America or from Africa or from Asia," he said.
"But instead, the challenge facing the Church really is in the First World and specifically in western Europe."
Bishop Dunn said the new pope had had the reputation as "the Panzer cardinal" -- "you sort of imagine him driving a tank through the Vatican".
But he was also "a very gentle man" with great culture and learning.
The new pope has for the past 23 years been the head of the Congregation for the Doctrine of the Faith, the modern successor of the Inquisition.
But Bishop Dunn said decriptions of him as having been the "cardinal of the Inquisition" were a myth.
"He's gentleman. He's a person of great culture."
- NZPA
NZ church official describes Rome joy as Pope elected
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