But a spokeswoman for National leader Simon Bridges said there had been "no discussions about deals in seats going on".
She said there is always a lot of rumour and speculation around coalition partners for National.
"We've always said options will appear before the election. We've already seen the Sustainable New Zealand Party.
"Time will tell what else comes up."
Ngaro did not respond to request for comment.
Ross tells the Herald is "relaxed" at the prospect of Ngaro, or any other MP, challenging for Botany.
He said if an MP wants to stand, that's their choice.
National MP Judith Collins told The AM Show the prospect of a Ngaro-led party was "an interesting idea".
But she did, however, say it was "all rumour and speculation".
Political commentators say the move would not be a bad idea.
Bryce Edwards said the prospect of Ngaro forming and leading the party is "to be taken very seriously".
"It's very clear this is what National needs. They need a coalition ally and this has always been on the cards," he said, referring to the emergence of a conservative Christian party.
He said there was always a bit of uncertainty around the prospect of a blue/greens party and whether that would work.
"Whereas a Christian socially conservative party does fit with National in some way or another."
He said the party could fit in well within the right, as Act has focused more on economic libertarianism rather than social conservatism.
Political commentator Ben Thomas said in the past, conservative and Christian parties have hovered at over 4 per cent of the vote so the establishment of a new, Ngaro-led party makes sense.
"Jami-Lee Ross's implosion in Botany gives National a unique chance to surrender a seat to a client party, and if a new party could pick up that seat then it could channel votes that have been wasted in the past on the Conservatives or Christian parties into a minor party that could support National."
Despite this, he thinks it's unlikely the party will get off the ground.
Leighton Baker, the leader of the New Conservative Party, said he was hoping to talk to Ngaro in the "near future" about the prospect of the new party.
He said there would be a bit of distance between the two parties as the New Conservatives had never established itself as a Christian Party.
But he said Ngaro's party would be on the "same side of the ledger" as the New Conservatives and that would split the vote which "is not that great".