WELLINGTON (Reuters) - New Zealand's small nationalist party, which has a key role in deciding the next government, is holding a meeting of its caucus on Wednesday as they near a decision on which party to back in a coalition.
Winston Peters, the leader of the New Zealand First Party, met with the ruling National Party and the opposition Labour Party on Tuesday evening after wrapping up two days of talks with his party's board.
Peters has said a decision on the make-up of the next government was likely sometime this week. New Zealand First members of parliament told local media the party was nearing a decision.
"We're getting close," NZ First MP Fletcher Tabuteau said.
Peters said on Tuesday that the board and caucus of his party had reached a near consensus on policy early in the week. That would have to be taken to the two major parties, and then further discussions would take place with the New Zealand First caucus and board before a final decision was made.
New Zealand has been in political limbo since an inconclusive Sept. 23 election which gave neither major party enough seats to govern alone, leaving them reliant on New Zealand First to form a government.
The New Zealand First Party has more in common with Labour on the policy front - both want to curb the number of immigrants coming into the country, restrict foreign ownership, change certain trade deals and adjust the central bank's mandate.
But some say a two-way coalition with National, which has been in power for nearly a decade, would be more straightforward than a three-way coalition with Labour and the Greens. Labour needs both the Greens' and New Zealand First's seats for a majority in parliament.
(Reporting by Ana Nicolaci da Costa and Charlotte Greenfield; Editing by James Dalgleish)