The Maori Party will stay on the cross benches over the next term of Parliament and vote on an issue-by-issue basis, its leaders said yesterday.
Labour initially sought support from several parties, including the Maori Party, to put together a government.
But Maori Party co-leaders Tariana Turia and Pita Sharples said it became clear yesterday that Labour already had the numbers to form a government and was not prepared to meet enough of the party's bottom lines to win its support.
Instead the party's four MPs would sit on the cross benches and vote on an issue-by-issue basis.
"After careful consideration ... we've decided to stay in opposition," Mrs Turia said.
"We will vote on a case-by-case basis on how we think the Government is going."
In the first instance that would probably mean a "yes" vote on confidence and supply because as yet there was no reason to vote against the new Government.
"The most important thing for us to do over the next three years is to consolidate our party and we intend to do that."
The party would seek to push its own agenda through member's bills and vote with other parties where they held shared interests.
Mrs Turia said there were some policy similarities between Labour and the Maori Party.
She hoped Labour would consult the party on some aspects of its budgets and legislation in order to get support for them.
Dr Sharples said the party had also developed good relationships with other parties through the talks process and could also work with them if their interests converged.
Both leaders did not believe the party's lengthy internal process of hui around the country had left it sidelined from talks. Lines of communication had remained open throughout.
Mrs Turia said National also had not offered to meet enough of the party's bottom lines to win its support.
Although the party had held talks with National, sitting in opposition did not mean the party was moving closer to it, she said.
When the Maori Party had voted with National in the previous term it had done so independently, based on its own principles.
Mrs Turia would not say which candidate for Speaker the party would support.
Labour MP Margaret Wilson was the previous Parliament's Speaker, but National has indicated it would put up list MP Clem Simich for the role. Who fills the position is decided by a vote in Parliament.