NZ's Clark seals coalition

Helen Clark says the new coalition will mean stability

New Zealand's Prime Minister Helen Clark has formed a minority coalition government following her election success late last month.

Ms Clark's Labour Party, which won 52 of the 120 seats in Parliament, formed a coalition with its close ally the left-leaning Progressive Coalition, which won two seats.

Labour also reached agreement with the United Future Party, whose nine MPs will now back the government on votes of confidence and budget issues, though the United Future Party will not be a formal member of the coalition.

The opposition National Party was trounced in the election

But the Green Party has declined to give Ms Clark parliamentary support due to a disagreement over genetically modified food and livestock.

Labour plans to lift a moratorium on the commercial release of genetically modified organisms, while the Greens want the ban to stay.

"Labour's bottom line that the moratorium... must be lifted in October next year means that we are unable to reach common ground," said co-leader of the Greens, Jeanette Fitzsimons.

Meanwhile, New Zealand's main opposition has launched an investigation into the rout it suffered at the election.

The centre-right National Party lost nearly a third of their seats after a campaign derided both by analysts and from within the party as flawed and ineffectual.

The party, which dominated New Zealand politics for decades after World War II, now has just 27 parliamentary seats.

Clark will spell out her plans for the next three years at the opening of parliament on 27 August.

Labour campaigned to spend more on health, education, and defence, and to ratify the Kyoto protocol on climate warming.