Big parties woo Peters amid political limbo

The country settled in yesterday for at least a month of political limbo as newly elected MPs gathered after the inconclusive election.

The National Party Cabinet, which has only caretaker responsibilities until a new government is formed, met in Wellington amid predictions that negotiations on a future coalition would not start until the end of the week and would be a drawn out affair.

All eyes will be on the 17 New Zealand First party MPs holding the balance of power in the 120-seat Parliament, who will meet today to appoint a negotiating team under leader Winston Peters.

He continued to give nothing away yesterday on whether NZ First would do a deal to keep the Nationals in power or form a centre-left government with the main opposition Labour Party.

Both the Prime Minister Jim Bolger and Labour's Helen Clark continued to maintain they could govern with Mr Peters, who has confessed he is going into a bidding war to get the best deal.

National, the largest party with 44 seats, would have the narrowest of overall majorities if it combined with NZ First. Labour with 37 and Mr Peters' party would need the support of the NZ Alliance's 13 MPs on a confidence vote to take power.

Yesterday, Mr Bolger said he had a 50-50 chance of staying in power and would not rule out running a minority government with no formal coalition.

A major issue is whether Mr Peters would work with Mr Bolger, who sacked him from the Cabinet in 1991, prompting him to establish the NZ First party.

Mr Peters has said recently that personalities and old scores should be put aside in the country's interest.