Historic coalition deal agreed 

John Key has sewn up coalition deals with three political parties and has set a speed record for forming a government under MMP.

The historic agreements with the Maori Party, Act and United Future have seen National hand out five ministerial positions to coalition colleagues.

And the party has also given ground on some policies.

Act Party leader Rodney Hide picks up local government and regulatory reform, along with an associate commerce role while his colleague Heather Roy will be Minister of Consumer Affairs and associate defence and education minister.

"A week ago New Zealand voted for a centre right government and today with this historic agreement we have one," Hide says.

The Act Party also secured a special review of the Emissions Trading Scheme.

"I think we've got a good compromise for the country," says Hide.

New task forces will be created, including private sector representatives, to look at slashing government spending. But the arrangement has not gone down so well with one of National's other partners.

"I can't imagine anybody from the private sector to be able to come into our office and go through the budget to go through it line by line and tell us what we will be doing," says Maori Party co-leader Tariana Turia who was quickly reassured by Key.

"They're not there to be a line by line slash and burn exercise," Key says.

The new allies announced their new relationship under the watchful gaze of their ancestors and a copy of what the Maori Party calls our sacred covenant.

"We feel very honoured to be in this room alongside of the National Party to be able to show to the country that this document is important and so is our relationship," Turia said.

And Key is confident the relationship will last. "The next three years will no doubt be hard work, like any relationship there'll be tests of it," he says.

Turia has experienced testing times before but one potential conflict has already been tidied away - the future of the Maori seats.

"The abolition of the Maori seats won't take place without Maori giving their approval of that," says Key.

The controversial foreshore and seabed law will be reviewed and Maori Party co-leader Pita Sharples becomes the new minister of Maori Affairs and associate education and Corrections minister.

Turia will be Minister for the Community and Voluntary Sector and associate health, social development and employment minister.

"I see it as a strengthening of the executive that we are bringing to the table people that have a real contribution to make," Key says.

And United Future is also keen to contribute. Leader Peter Dunne keeps the Revenue Minister and associate health jobs he held under Labour.

"The Finance Minister's job is to spend the money, revenue minister is to raise it - so a very important job," says Dunne.

The former Labour government is watching the negotiations from the sidelines.

"If you count the two leaders of the Maori Party, perhaps it is a five headed monster but we hope that can be managed...it is in the interests of New Zealand that there is stability," Labour leader Phil Goff says.

Key is also clearly putting a premium on stability and knows that juggling the new relationships could be one of his toughest challenges.