KEY POINTS:
In slamming the door in Winston Peters' face by ruling him and his party out of post-election negotiations, National has made a huge call. But it is the right call politically.
The decision to accord pariah status to the NZ First leader throws down the gauntlet to Labour to do the same. It drastically ups the ante on Helen Clark to sack Peters from his ministerial portfolios following Owen Glenn's damning testimony to Parliament's privileges committee.
The Prime Minister can't. She needs NZ First now and after the election. She needs Peters in the short term to pass Labour's flagship Emissions Trading Bill. She needs to remain onside with Peters in the medium term for Labour to have any show of a fourth term in Government.
Her excuses for not ditching Peters make her look weak, however. It makes Labour look like it will ignore anything he does simply to cling to power.
In wiping his hands of Peters, John Key looks strong. It reinforces National's "real change versus no change" message.
Even if he has given himself what Peters calls "a wriggle-out clause", Key has secured a massive moral advantage which he can take into the election campaign.
A silent majority will quietly applaud the removal of Peters as perennial kingmaker. It will applaud and then reward Key for standing up to Peters rather than buckling to his demands and whims.
Key is still taking a gamble. National could miss out on Government for another three years if NZ First holds the balance of power.
However, this is the gamble of John Key, the money trader; the gamble of someone who sees the potential dividends far outweighing the costs and is willing to trust his instincts.
The ploy is well-timed. Labour is starting to recover in the polls. National's rejection of Peters now implicitly ties him and his party to Labour, which was already in danger of suffering collateral damage from his truculent behaviour of recent weeks. Someone who Labour had tried to keep hidden in the garage is now running amok in the living room.
However, the big plus for Key is that he can now argue a vote for NZ First is effectively a vote for Labour. And he can say a vote for Labour is a vote for NZ First.
Peters can no longer argue that a vote for NZ First is a vote for a moderating force on a National-led Government.
Beyond the obvious - Peters' denying National power - the potential downsides for National appear few.
It could increase the likelihood of Labour tacitly collapsing its vote in Tauranga to boost Peters' chances of winning back the seat - especially if NZ First looks like it is not going to reach the 5 per cent threshold. But National does not think that would give him enough votes to win.
NZ First loyalists will see National as capitalising on circumstances to complete its long-held objective of destroying Peters and his party. Peters is already arguing that Key is the puppet of the same (unspecified) forces within National who plotted to have him removed from the party's ranks in the late 1980s and early 1990s.
Ruling out dealing with Peters will also be criticised as another sign of National's desire to get rid of MMP. In fact, it is a further maturing of MMP. For the first time, one party is formally ruling out negotiations with another on grounds other than ideology.
Key has effectively drawn a line in the sand which declares the majority will no longer be held hostage by the unacceptable behaviour of a minority.
