Ms Clark may have had little choice about appointing Mr Peters
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The controversial appointment of New Zealand's new foreign minister has been criticised both at home and abroad.
Winston Peters, head of the New Zealand First Party, has been appointed to the position despite making a series of outspoken comments against immigration.
Opposition National Party leader Don Brash said the decision to give the job to Mr Peters would do "huge damage for our international reputation".
The Australian newspaper described the appointment as a "bad joke".
Sydney's Daily Telegraph described Mr Peters as a "diplomatic nightmare", and other commentators said that by choosing Mr Peters as the foreign affairs minister, New Zealand was sending a negative message to its Asian neighbours.
Mr Peters has made many outspoken remarks against immigration, particularly from Asia.
Early in this year's election campaign, he warned against the "militant underbelly" of the small Muslim community in New Zealand.
In 2002 he said the country was at risk because of an influx "of people whose views are formed by alien cultures and rigid religious practices".
But on Tuesday he said that no foreign leader had ever questioned his views on immigration.
"I've been to China, Malaysia, Singapore, Philippines and a whole host of other countries. Never did one leader or commentator ever [raise] that issue with me," he is quoted as telling national radio.
Despite the criticism of Mr Peter's appointment, Ms Clark defended her decision, saying that as a senior member of parliament, "he certainly has the authority and stature to be the minister of foreign affairs, and that is the decision we have reached".
But analysts say she may have been left with little choice but to appoint him to the post, amid fierce horse-trading necessary to secure her an overall majority in parliament.
'Similar views'
Ms Clark's Labour Party won 50 of the 121 seats in parliament in the tightly fought 17 September elections.
As a result of negotiations with minor parties, she finally announced on Monday that she had made a deal with three other parties - the Progressive Party, the United Future Party and New Zealand First - to form a coalition.
Mr Peters, as head of New Zealand First, was named minister of foreign affairs.
He will be responsible for foreign policy but will not handle refugee and trade issues, Ms Clark was quoted as saying on Monday.
He will also not be a member of the Cabinet, where most of his policy decisions will have to be approved.
Despite his criticism of Labour's immigration policies, Mr Peters' party has echoed Labour's anti-nuclear stance and its refusal to commit troops to the US-led coalition in Iraq.
"His views on foreign policy are very similar to those of Labour," Ms Clark insisted on Monday.