By Ana Nicolaci da Costa
WELLINGTON (Reuters) - The New Zealand First Party, which emerged as a kingmaker after New Zealand's election in September, will begin preliminary talks with both the ruling National Party and separately with the Labour Party this week, according to a media release.
The statement comes after Prime Minister Bill English told media on Monday that he had called New Zealand First leader Winston Peters but he had not picked up. Both parties have since said the two leaders had spoken by telephone.
While English's National Party won a 10-point lead over the opposition Labour Party in the Sept. 23 election, neither won enough seats to govern alone and both have been left courting the outspoken Peters to form a government.
English's National Party secured 58 seats, only just short of the 61 seats needed to form a government in New Zealand's proportional representation system. Labour won 45 seats, New Zealand First won nine and the Green Party seven.
"Preliminary talks will proceed this week when arrangements suitable to both parties are concluded," the New Zealand First Party said on its website.
It is a familiar situation for Peters. The veteran politician is holding the balance of power for a third time, having previously joined coalitions led by both National and Labour.
While his policies are thought to have more in common with those of Labour - both want to curb immigration - some analysts say he could opt for National as it would be a simpler coalition of just two parties.
Labour, however, would have to form a three-way coalition which would include the Green Party, with which it already has a working agreement.
There was speculation over the weekend that the National Party could sound out the Greens, but English said he was undecided.
"I think the Greens would need to show that there is a serious possibility of negotiation," English told local media.
"So far Mr. Peters has indicated that he is willing and able to negotiate, including with National, the Greens haven't indicated that so far...the Greens are pretty committed to working with Labour alone."
James Shaw, the leader of the Green Party, declined to comment when contacted by Reuters.
Labour leader Jacinda Ardern, who boosted her party's chances after taking over as leader in August, said she had spoken to Peters earlier and confirmed that their teams were looking to meet this week.
"We will look to hold a meeting between our respective teams later this week, while we wait for special votes to be counted," Ardern said in an emailed statement.
A final tally of the results is due on Oct. 7, when "special votes", which make up 15 percent of the total and include overseas votes, are released.
(Reporting by Ana Nicolaci da Costa; Editing by Simon Cameron-Moore)