WELLINGTON (Reuters) - New Zealand acting Prime Minister Bill English on Monday said it could take until the end of the week to confirm the country's next government.
The country has been in political limbo since Sept. 23 when neither the National Party, which has led the government since 2008, or the Labour Party, won enough seats to form a government.
That left the nationalist New Zealand First Party in a position to determine the next government and leader Winston Peters spent five days last week holding negotiations with both major parties.
New Zealand First's board was meeting at Parliament on Monday, a spokeswoman said. Peters has said the board must meet before a final decision can be made.
But Prime Minister and National Party leader Bill English told Radio New Zealand there were a number of issues still to be worked out, including ministerial appointments and that his staff were going back and forth with New Zealand First on policy issues over the weekend.
"While New Zealand First are having a discussion today they won't be dealing with completed agreements because there's still outstanding issues," English said.
When asked whether he anticipated a confirmed government by the end of the week, English replied: "I would expect so, yes."
Peters reiterated on local radio that there would be an agreement by the end of the week, but did not want to "put a time on it."
Peters had originally expected to reach a decision by Oct. 12.
Labour leader Jacinda Ardern on Saturday released a video on YouTube in which she defended the process dragging on.
"If you're going to form a government, of course you need to understand one another's policy positions, where you have consensus and the kind of government you want to form ... It's only natural that that would take a little bit of time," she said.
NZ First's policies are more aligned with those of Labour - both favor curbing migration and foreign ownership, renegotiating certain trade deals and changes to the central bank's approach to monetary policy.
But observers have said that a two-way coalition is much simpler to put together than one involving three parties. The Greens and Labour would have to get together for the left-wing parties to form a government.
The political uncertainty has hit the New Zealand dollar, which has fallen 2.9 percent since the vote. The Kiwi opened the week relatively unchanged from Friday at $0.7169.
(Reporting by Charlotte Greenfield. Editing by Jane Merriman)