NZ First leader Winston Peters has announced he will form a Government with Labour.

But the Greens appear not to be part of the coalition Government and will instead hold a confidence and supply agreement.

Speaking in the Beehive Theatrette on Thursday evening, Mr Peters said siding with National would have meant a "modified status quo", versus "change" with Labour.



Mr Peters said the coalition was the "decision of the New Zealand people" and that the call was one from NZ First, rather than his sole decision - and it was only decided 15 minutes before his press conference.



"This decision is owed to the New Zealand people, who put us here. Not to the politicians, but to the New Zealand voters."

He refused to confirm what his position in the Government might be.

While reports have suggested that Mr Peters and Greens leader James Shaw do not get on, the NZ First leader denied this was a factor in his decison.

"Some of you say that I hate the Greens and I hate James Shaw and I can tell you, I have never said that either privately or publicly," he said.

The long-serving MP said his party would not have partnered with Labour if it did not believe in Jacinda Ardern's ability to be Prime Minister.

"We wouldn't have made the decision if we didn't," he said.

Economic fears

Mr Peters said they believed there was a high chance of an economic slow-down and that capitalism needed to "regain its human face".

He said he wanted to address this scenario head-on, so people couldn't blame NZ First for any economic crash.

As expected, Mr Peters indicated that regional New Zealand was central to NZ First policy making.

"Protecting the regions is at the forefront of our thinking."

Bottom lines

Mr Peters notably campaigned on a number of "bottom lines" - policies he claimed he wouldn't compromise on and which any party looking to form a Government with him would have to adopt.

One of those was a referendum on the abolition of Māori seats.

But Mr Peters said he didn't get enough votes to push that policy home and it was "now in the hands of the Labour party".

During the election, Labour swept all of the Māori seats.

Joy and jubilation

On Labour's floor, there was a cry of jubilation as members watched Mr Peters make his announcement.

"In the last 10 years I have never heard sounds like that on Labour's floor," Newshub's Lloyd Burr said.

Labour leader Jacinda Ardern said the negotiations had been "courteous, constructive and robust".

"Throughout, we have focused on our shared values and the policies that can take New Zealand forward," she said.

"We are both committed to forming a strong and durable Government that can deal with the many challenges this country faces."



Ms Ardern's next step is to approach Dame Patsy Reid to ask if she can form a Government.

The Opposition

National leader Bill English has vowed to be part of the "strongest Opposition party that Parliament has seen".

He said the Labour-NZ First Government was a "result of MMP in New Zealand"

"Almost one in two New Zealanders did support us," he said - but it wasn't enough.

Joining National in Opposition is ACT. Its leader, David Seymour, has also come out firing.

Mr Seymour said New Zealand was now "threatened by a madman on the loose".

"Winston Peters' peverse marriage with Labour and the Greens threatens countless groups: taxpayers, Auckland infrastructure users, millennials, immigrants and the businesses relying on them," he said.

"If this coalition governs as it campaigned, then New Zealanders face a big-spending, tax-everything-that-moves, 1970s-protectionist, red-tape-loving Government."

ACT has one seat in this new Parliament, thanks to Mr Seymour retaining his Epsom electorate seat.

The decision

In the end, it all came down to NZ First. It may have only garned 7.2 percent of the vote, but both Labour and National needed its support to be able to form a Government.

In the past Mr Peters has worked with both Labour-led and National-led coalitions.

For this election, with just two seats between National and the Labour-Greens bloc, NZ First could have backed either.

Newshub.