Prime Minister John Key has confirmed that United Future leader Peter Dunne will be reinstated as a minister, and says National could work with NZ First or the Conservative Party.

Mr Key said today he would prefer to continue working with Act, the Maori Party and United Future following this year's election but could add Colin Craig's Conservative Party.

In a statement ahead of his post Cabinet press conference this afternoon Mr Key said while there had been differences between National and its current three partners, "together our four parties have formed a stable and successful Government since late 2008".

"We also have policy differences with the Conservative Party, however it is likely that there would be enough common ground to work with them in Government."


Mr Key ruled out working with Labour, the Greens and Mana, "on the basis that there is insufficient common ground to achieve a stable and successful working relationship".

"These parties represent a far left wing agenda that we do not believe is good for New Zealand," said Mr Key.

Mr Key said a post-election working relationship was very unlikely with Winston Peters' NZ First but would not rule the possibility out ahead of the election.

"In 2008 we ruled them out because we were unable to reconcile some of their statements on the Glenn donation matter. Six years has passed and, should New Zealand First be returned to Parliament, we would not rule out a discussion after the election."

Mr Key said he was now refusing to rule out working with Mr Peters because a few things had changed in recent years.

That included the fact that it was now six years since the Owen Glenn donations saga.

Since then Mr Peters and NZ First had been returned to Parliament and if he was returned again this year that would indicate he had passed a test with the public.

Another factor was that there were some National voters who would rather see a National Government with NZ First than a Labour Greens Government.


Mr Key said one unlikely option was that National could form a Government with NZ First abstaining on confidence and supply.

Mr Key said it was most likely that any post-election working relationships would be via Confidence and Supply Agreements, "as these have worked well in the past two Parliamentary terms".

Labour leader David Cunliffe said Mr Key's announcement on potential partners was "the dance of the desperate all over again''.

Mr Key's comments on NZ First were "very interesting '' given he ruled him out six years ago saying it was a matter of principle not policy.

"Clearly his principles have a half-life of less than six years, perhaps they're a McDonald's special for a limited time.''

Mr Cunliffe said Labour could work with any other party other than National, Act or the Conservatives although talks with Mr Dunne were very unlikely.

Prime Minister does not rule out working with NZ First post 2014 election. Big shift.

Key confirmed today that United Future leader Peter Dunne will be reinstated as a minister.

Mr Key announced the changes to the National-led Government's Ministry this afternoon.

Mr Dunne has been given the Internal Affairs, Associate Health and Associate Conservation portfolios. He will remain a minister outside Cabinet.

Michael Woodhouse will fill the vacancy within Cabinet created by Internal Affairs and Local Government Minister Chris Tremain, who will resign at this year's election.

Mr Key also announced a new minister outside Cabinet - Maungakiekie MP Sam Lotu-Iiga would become Minister of Pacific Island Affairs and Associate Minister of Local Government.

The Prime Minister forced Mr Dunne to resign on June 7 last year for his refusal to fully co-operate with the Government inquiry into the leak of Rebecca Kitteridge's report into spy-agency Government Communications Security Bureau.

Mr Dunne refused to hand over a complete set of emails between him and Fairfax reporter Andrea Vance.

The Henry inquiry could not identify who leaked the report.

Mr Key said he was pleased to welcome Mr Dunne back as a minister.

"We have worked together well in the past, and United Future continues to be a valued partner in government."

"While 2013 brought its challenges, both Peter and I start this election year looking forward, not back."

He congratulated Mr Lotu-Iiga, who took over the Pacific Island Affairs role from Hekia Parata.

"Sam has very strong ties with the Pasifika community and has represented their interests in caucus well.

"He is well placed to build on the work that Hekia Parata has done in this portfolio this past term."

Social Development Minister Paula Bennett has been given Mr Tremain's Local Government portfolio.

Todd McClay will become Associate Tourism Minister.

The new ministers will be sworn in by the Governor-General on January 28.