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There will be no new policy deal between National and the Greens, with the chasm between the parties widening over policies such as the Government's proposed SkyCity convention centre deal and state asset sales.
Green Party co-leader Metiria Turei this morning confirmed talks about a new memorandum of understanding (MOU) between her party and National had ended.
The two parties, who are at opposite ends of the political spectrum on environmental and social issues, found some common ground last term and agreed to work on initiatives including a subsidised home insulation programme, pest control and toxic site clean up.
They have been in talks over an extension to their previous deal since the November election when the Greens achieved their best result returning 14 list MPs.
Ms Turei said her party was disappointed National had now decided against expanding the MOU.
"We presented them with a significant list of policy initiatives that included their own policy and ours, some which cost money and some which did not.
"I think it's fair to say National has hardened their right-wing stance since the election. The Greens are a much stronger opposition in this term of Government and there is much less room for agreement on policy that we might have previously expected.
"We have been strongly opposed to much of their programme so far - their deal to sell gambling law to SkyCity for example, we are completely opposed to and we will say so very strongly.''
Mrs Turei also cited National's plans to sell off state assets and the prospect of a renewed investigation of mining opportunities in the conservation estate.
A spokesman for Prime Minister John Key said in deciding not to broaden the current MOU "we took into account the quite different priorities and philosophies of the two parties''.
"With a zero Budget coming this year, the Government did not have additional resources available for the policy priorities of the Greens.''
However, National would continue to work with the Greens on the projects underway since 2009 and it was possible there would be policy areas where the two parties worked together in the future.