N Zealand gets its youngest woman PM

New Zealand's centre-left opposition leader Jacinda Ardern was poised to become prime minister yesterday in a stunning rise to power, after maverick populist Winston Peters backed the charismatic 37-year-old to form a government.

Peters' decision, which came after the September 23 election ended deadlocked, gives her Labour Party the numbers to take office with his New Zealand First and the Greens.

"It is an absolute honour and a privilege to have the ability as Labour Party leader to form a government for all New Zealanders," she told reporters, saying it was "an exciting day".

Peters, who has been offered the deputy prime ministership under the deal, told reporters he believed Ardern offered change that could provide "capitalism with a human face".

He added: "That's why in the end we chose a coalition government of New Zealand First with the New Zealand Labour Party."

The 72-year-old "kingmaker" was full of praise for Ardern, who revived Labour's fortunes when she became party leader just weeks out from the election.

"She exhibited extraordinary talent in the campaign itself from a very hopeless position," he said.

Once the Greens formally approve the coalition, Ardern will become New Zealand's youngest leader since 1856 and only the third female prime minister of the nation of 4.6 million.

She campaigned on issues such as housing affordability and free tertiary education. Environmental action and improved healthcare were also constant themes at the hustings.

The result was a bitter blow to outgoing conservative Prime Minister Bill English, who ran an unexpectedly strong campaign to claim 44.4 percent of the vote, far higher than Labour's 36 percent.

He congratulated Ardern and said he had not yet decided whether he would remain National party leader in opposition.