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Prime Minister Helen Clark has announced the details of the new Labour-led government.
The government will be a Labour-Progressive coalition, with confidence and supply agreements with United Future and New Zealand First.
Progressive's leader Jim Anderton will have a post in cabinet while New Zealand First leader Winston Peters and United Future leader Peter Dunne will have ministerial positions outside of cabinet.
Peters will be the Minister of Foreign Affairs, Racing and the Associate Minister for Senior Citizens while Dunne will be the Minister of Revenue and the Associate Minister of Health.
In announcing the new government Clark said election night had delivered a fractured parliament and since then Labour has been looking for an arrangement which is as inclusive as possible.
She says she believes the deals struck reflect the need for collaborative relationships and willingness to share power and decision making.
The Green Party has signed a co-operation agreement that means it won't oppose the new government on confidence and supply votes. Clark says legislation will have to be debated issue by issue but she believes the new arrangements are durable.
Green Party co-leader Rod Donald says he is disappointed his party has been excluded from the new government.
Donald says the Green Party has a comprehensive policy arrangement with the Labour Party, including agreements on solar water heating and a Buy New Zealand Made campaign.
Resignation over deal
New Zealand First's president Doug Woolerton is reported to have resigned as head of the party in an apparent protest at Peters joining a Labour-led cabinet.
It is believed Woolerton, who formed New Zealand First with Peters 12 years ago, will remain in the party as an MP and party member.
A cabinet post is at odds with Peters' pre-election promise not to join a formal coalition, but to sit on the cross-benches and only support the largest party on confidence and money supply votes.
Peters getting the foreign minister role is a controversial appointment given his anti-immigration sentiments and protectionist policies.
Peters had also been given an offer by the opposition National Party to support a centre-right government.
Maori Party to consolidate
The possibility of a National Party-led government was ruled out when the Maori Party said it would not be joining either side.
National leader Don Brash could not have formed an alternative government without the Maori Party's four MPs.
Maori Party leaders met with Clark on Monday morning and understood she already had the numbers to form a government without their support.
The party says it will work on consolidating itself now it has decided to sit on the opposition benches. They will vote in support of the new Labour-led government at its first confidence vote but will then vote on issues on a case by case basis.
Maori Party co-leader Pita Sharples says the decision was made on what they heard from its members at hui they held around the country and the negotiations with Labour.
Nats unhappy with appointments
National Party deputy leader Gerry Brownlee has condemned Clark for what he's termed disgraceful changes to the constitution in forming her new government.
Brownlee says giving Peters and Dunne ministerial posts outside cabinet puts the whole idea of collective responsibility at risk and says having two of New Zealand's formal representatives outside government is wrong.
But Helen Clark says appointing ministers to posts outside cabinet is a question of constitutional evolution, not change.
She says
the government has entered a supply and confidence agreement with
United Future and New Zealand First and awarding the leaders of
those parties portfolios outside cabinet doesn't raise huge
constitutional issues.
