Winston Peters says there is still work to be done with both parties before NZ First can make a decision.
Peters said they got a lot of work done and the boards engagement was complete and it was going home.
Peters said further discussions were needed with the leaders of both parties.
Earlier, former United Future leader Peter Dunne said whatever Government NZ First forms is doomed to fail,
Parallel negotiations, mirroring what happened in 1996, run the risk of discrediting the process and he foresees the same outcome of that first year of MMP.
"I'm thinking it won't last, whatever it is," he said.
"I just think there's an in-built self destruct mechanism. It's the vanity of the party doing the negotiating, it's all about it rather than what's in the best interest of the country and you can't build a house that way."
He believes the major parties are scared of kingmaker Winston Peters and they shouldn't be forming a government on that basis. Peters snuck in a back entrance to parliament on Tuesday morning, avoiding questions from the waiting media.
Much of the party's board and caucus followed suit ahead of the continuation of Monday's caucus meeting.
Senior MP Tracey Martin said talks had gone into the evening but was unsure when the board and caucus might reach a decision.
"I don't know. We're still working through some stuff," she said.
New MP Shane Jones offered a cryptic response to questions: "Soon the Monarch Butterfly will emerge."
Earlier, Labour leader Jacinda Ardern said her party's coalition negotiations with NZ First were yet to get into the nitty gritty of ministerial positions.
Negotiations could not be concluded until until those discussions had happened, she said.
"The governor-general has to know there is the... ability of parliament to secure the numbers in the house so there has to be eventually an announcement around the way that government would be made up," she said.
Holding the balance of power, NZ First can either grant National a fourth term, by joining it and forming a government, or it can make Ms Ardern prime minister in a Labour-led government.
Its MPs and board have in front of them two option papers setting out the deals offered by the main parties. But despite this position of power, Ms Ardern hit out at the idea the major parties were "lap dogs" and bending over backwards to do everything they could to please Mr Peters.
"In these negotiations, we have it within our power to say these are the things we are willing to talk about and compromise on and these are the things we are not," she said. "We have a lot of power in our hands," she said.