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Labour newcomer Jacinda Ardern set to become Prime Minister

New Zealand's centre-left opposition leader Jacinda Ardern was poised to become prime minister Thursday in a stunning rise to power.

Peters' decision, which came after a September 23 election ended deadlocked, gives her Labour Party the numbers to form a coalition government with Peters' New Zealand First and the Greens.

"We had a choice to make for a modified status quo or for change... that's why in the end we chose a coalition government of New Zealand First with the New Zealand Labour Party," Peters told reporters.

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.

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

While Labour and the Greens have to 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.

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

It is the first time since New Zealand adopted proportional voting in 1996 that the party which claimed the largest slice of the vote has failed to form government.

Peters had promised to reveal his choice on Thursday afternoon but had already missed several self-imposed deadlines to settle the issue.

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He stretched the announcement out as long as possible, appearing before reporters early in the afternoon to say he still had not made a decision.

"It's seriously difficult because there are pros and cons for every part of this decision we've got to make," he said before heading off for lunch.

He said the talks went down to the wire, with new information arriving throughout the day, finally addressing a media conference at 7:00pm (0600GMT).

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