Formal negotiations kick off with behind-the-scenes work well under way

Jo Moir/STUFF

Winston Peters speaks to media following negotiation talks.

Winston Peters says negotiations were "very constructive" on Sunday and he expects to continue those meetings all day and into the night on Monday.

He said the talks were dealing with things "policy by policy" because that's what "really matters".

"Policy is everything, otherwise it's just about personalities and that's your guys game," he told media after completing talks with Labour, which was a two hour meeting.

ROBERT KITCHIN/STUFF

Speaking after the talks, Labour leader Jacinda Ardern said the meeting with NZ First had been excellent and productive.

Peters had earlier in the day met with National for about half an hour longer.

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Speaking after the talks, Labour leader Jacinda Ardern said the meeting had been excellent and productive.

Winston Peters said the talks were dealing with things "policy by policy" because that's what "really matters".
HAGEN HOPKINS/GETTY IMAGES

Winston Peters said the talks were dealing with things "policy by policy" because that's what "really matters".

"Negotiations will continue for Labour with the parties that we are looking to form a stable durable coalition government with," she said.

The NZ First leader said he felt the negotiations were "going forward" and progress was being made.

"If you go into talks with a mind that's not neutral, not independent, if you go into it with an open mind you'll possibly get the right outcome.

"If you don't keep your eyes wide open to all the possibilities, you may miss a great chance for your country and for the country's economic and social progress," Peters said.

ROBERT KITCHIN/STUFF

Caretaker Prime Minister Bill English leaves Parliament grounds after completing the coalition negotiations with Winston Peters.

All nine possible scenarios of government, including coalition or supply and confidence with National or Labour or sitting on the cross benches, were all still on the table.

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"Eventually things will go to the full caucus and full board on both sides, even if it doesn't it's going to go to ours anyway," he said.

The NZ First board was on "standby" to turn up "one day soon".

ROBERT KITCHIN/STUFF

Winston Peters went into coalition talks with Labour, after meeting National at midday.

TALKS WELL UNDERWAY

Talks aimed at forming a new government may be further advanced than the slow pace of Beehive action suggests.

Substantive face-to-face talks started on Sunday with a meeting at midday between NZ First and National and at 3pm with Labour as many commentators question whether Peters' self-imposed deadline of Thursday may be too tight.

ROBERT KITCHIN/STUFF

Winston Peters leaves his Bowen House offices for coalition talks with National.

On his way to the 3pm Labour meeting Peters briefly stopped to tell media he had "precisely nothing to say about these meetings at all until they are completed".

Asked whether there was anything he could say about what was discussed in the meeting with National, Peters said, "not that we're talking about now, no".

On the special vote count taking two seats off National, Peters said it was "rather important to wait and that's a fact". That was after first telling reporters they'd "made fools" of themselves speculating up until Saturday.

"Negotiations will continue for Labour with the parties that we are looking to form a stable durable coalition ...
HAGEN HOPKINS/GETTY IMAGES

"Negotiations will continue for Labour with the parties that we are looking to form a stable durable coalition government with," Jacinda Ardern said.

Earlier Peters had said the 2½ hour meeting with National had gone "fine, thank you very much".

'FRENETIC ACTIVITY'

The parties met briefly last week to agree on how the talks would proceed but Peters and Labour were keen to wait until after Saturday's return of special votes.

STUFF

National's Paula Bennett and Steven Joyce weren't revealing much as they arrived for coalition talks with NZ First on Saturday.

That saw Labour and the Greens pick up one seat each and National lose two seats, strengthening the Left bloc but still leaving both sides reliant on NZ First's backing to form a government.

But a source said party spokespeople had been "reaching out" to their counterparts to open discussions ahead of the formal talks while another insider said there had been "frenetic activity" behind the scenes.

That had included a previously-reported eight hour NZ First caucus on Wednesday that spilled over into Thursday.

On Saturday the Green and Labour leadership held talks in Auckland. 

There have also been instructions within the two big parties for key MPs to prepare for talks by identifying areas of agreement and major sticking points.

Peters has said he will announce his choice on Thursday, when the formal election result, or "writ", is returned.

His choices could include a full coalition deal, support on key confidence and supply votes or the option of sitting on the cross benches and abstaining and those key votes. The latter would leave National in power but having to negotiate issue by issue on all votes in Parliament.

Peters and his negotiating team, the same group who took part in the preliminary discussions last week, didn't speak to media as they left their Bowen House offices and headed to level two of the Beehive where their first meeting of Sunday, with National, took place.

THE TEAMS LINE UP

The NZ First team consisted of Peters, deputy Ron Mark, MP Tracey Martin, chief of staff David Broome, adviser Paul Carrad and staffer Kirsty Christison.

The only change to the Labour team from last week was the substitution of former deputy leader Annette King for Sir Michael Cullen, who is overseas. The others were Ardern, Kelvin Davis, Grant Robertson and senior staff members Mike Munro and Neale Jones.

The National team was made up of Bill English, his deputy Paula Bennett and senior MPs Steven Joyce and Gerry Brownlee along with chief of staff Wayne Eagleson.

Bringing Bennett into the team is a change from last week's line-up.

Security and sensitivity is even higher on Sunday than it was last week. Media have been blocked from filming anyone going into the meeting room and media with security passes have had their access stripped for the corridor leading to the negotiating room.

That meant media watching to see who entered the room from the National side had to rely on a view of their ankles through a closed door in Parliament or their heads from a lower Beehive floor.

Both main party leaders will be vying to make an offer Peters can't refuse without abandoning their core principles.

He is expected he will be offered the foreign affairs role, if he wants it, deputy prime minister as well as his passion, the racing portfolio.

After special votes were counted on Saturday, Labour and the Greens gained one seat each, meaning a National/NZ First coalition would reach 65 seats while Labour/Greens/NZ First would get to 63 seats - a majority with two votes to spare.

National announced earlier this year it would raise the retirement age to 67 in 2030 but Peters is expected to make it a condition of any deal that the age stays at 65.

Peters is set to build on his legacy SuperGold card, extending it from public transport to a full-fledged e-wallet providing discounts on doctors' visits and eye tests, and perhaps even power bills.

 - Stuff

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