By Charlotte Greenfield
WELLINGTON (Reuters) - New Zealand First Party leader Winston Peters began talks on Thursday with the governing National Party and opposition Labour Party aimed at forming a coalition government after last month's inconclusive election.
Peters, whose nationalist party holds the balance of power, has said no decision will be made until after a final vote count is released on Saturday.
"It's like being between the devil and the deep blue sea here," Peters told reporters at Parliament, according to the New Zealand Herald.
Peters held talks with Prime Minister Bill English and members of his center-right National in the morning and an afternoon meeting with Labour leader Jacinda Ardern, who told local media the conversation was "a great start".
"It's setting the agenda, the ground rules, the protocols, how we're going to go about it. Let's have an agreement about precisely how we're going to do this," Peters said in a video posted on Fairfax Media.
English's National Party won a 10-point lead over center-left Labour in the Sept. 23 election, but neither won enough seats to govern alone.
This is the third time Peters, 72, has held the balance of power after an election and he has previously formed coalitions with both National and Labour.
A complete count is due on Oct. 7 when "special votes" which make up 15 percent of the total and include overseas ballots are released. The final count is not expected to change the outcome.
Peters has said he will make a final decision by Oct. 12.
Observers said Peters' focus in talks will likely be on domestic policies, especially regional development to shore up his voter base, despite his rhetoric about limiting Asian investment and slashing immigration.
"Regional development is surely going to figure highly...I think there's no doubt New Zealand First is shifting to be more of a provincial, country party and that the important points are going to be directly related to that development," said Bryce Edwards, political analyst at Critical Politics in Wellington.
In one of the only indications of his priorities going into negotiations, Peters this week promised to revive the country's forestry sector, which has been a hot topic in his remote home region in the country's far north.
Peters plans to create state-owned forests and a quota system to favor local processors over those exporting logs to overseas, largely to China.
(Reporting by Charlotte Greenfield, Editing by Michael Perry)