Prime Minister Helen Clark said today she would not like to repeat her 1996 experience of trying to form a government with New Zealand First leader Winston Peters.
Last night's 3 News TNS poll showed the gap between Labour and National continuing to close from 11 points two months ago to 4 points now.
Labour was down five points to 40 per cent compared with two months ago, and National up two points to 36 per cent.
New Zealand First has made another strong showing, up three points to 11 per cent and in a strong position to negotiate a coalition with either of the main parties.
Speaking on Radio Live this morning Miss Clark said Labour was happy with the coalition partners it has had.
In its first term Labour formed a coalition with the Alliance with confidence backing from the Greens.
This term Labour formed a coalition with the Progressives getting confidence support from United Future and support from the Greens on many issues.
"I think we've been able to produce a strong government with that. If you ask me what my preferences are that's the way to go," Miss Clark said.
"It is true that we have had on occasion had support from Winston Peter's party but I do have the experience of going through nine weeks of negotiations in 1996 -- and New Zealand First led everyone to believe they'd go with Labour and then put the National party back into power -- and I don't think that's an experience New Zealand wants to repeat."
NZ First and National formed a Government in 1996 but the first MMP coalition ended in disaster with Mr Peters walking out of Cabinet and some of his colleagues staying behind to prop up the National minority government.
Based on current polling Mr Peters is set to be kingmaker again after this year's general election.
Miss Clark said Labour had worked hard to make MMP work -- a system she had not originally supported.
"I think it's our responsibility as political leaders to get on and make the system work," she told Radio Live.
"And I think we have made it work for New Zealand in contrast to that first disastrous term of the National New Zealand First Government which was just a shambles."
Miss Clark, who has not ruled out a coalition with NZ First, said Labour would fight to get enough support to form a strong government.
"I have to say after the public trashing the Government has been getting by all sorts of people in recent times I'm actually encouraged by the poll."
In the poll The Green Party moved up from 3.8 per cent to 6 per cent, while ACT and United Future both stayed below 2 per cent.
The Maori Party's support improved from 1.8 to 2.4 per cent.
A shock National Business Review poll on June 3 showed National ahead of Labour by one point.
Translated into seats in Parliament, the 3 News TNS poll would give Labour 49 seats (51 now), National 45 (27) and NZ First 14 (13).
The Greens would have seven seats (8 now) United Future two (8), the Progressive Party one (2) and the Maori Party 3 (1).
In the preferred prime minister poll, Miss Clark dropped three points to 36 per cent but stayed well ahead of National's leader Don Brash, who was up one point to 16 per cent.
Right behind him was NZ First leader Winston Peters on 15 per cent.
Under the scenarios shown in the poll, both the main parties would almost certainly have to make a deal with NZ First to form a majority government.
The 3 News TNS poll was taken between June 9 and 15 and has a margin for error of 3.1 per cent.
- NZPA
PM says new coalition not where she wants to go
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