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Labour leader David Cunliffe this week rejected the Green proposal for the two parties to campaign as a "Labour-Greens Government" in waiting, preferring to stick with a "Labour-led Government". But he has said he expected to negotiate a coalition agreement with the Greens after the election.
Mr Peters said Labour was right to reject it and saw it for what it was.
"You have an attempt by one party to destabilise another party by seeming to offer friendship and collaboration in a deal before the election campaign has even started, knowing full well that the other party has not invited that and does not want that. What do you call that? I call it unsuccessful politics.
"I think the Labour Party saw it for what it was and they are probably relieved.
"I am not surprised it was rejected."
Mr Peters said the Greens would have known what Labour's response would be and therefore putting up the proposal and making it public was "an attempt to torpedo the strategy of another party".
The stinging criticism is likely to cause some nervousness in the Green camp. Mr Peters has worked with the Greens much better this term than his previous term in Parliament, 2005 to 2008, when he vetoed the Greens from Government.
He made it a condition of his support for Labour that it was with the Labour Government only, not a Labour-Greens Government, on the grounds of stability. Asked yesterday if there was any party New Zealand First could not work with after the September 20 election, he said the Maori Party. "We don't believe in race-based politics," he said.
"They will tear this country apart in time if we carry on down that path."
He did not consider Mana to be a race-based party and did not cite it among NZ First's exclusions.
Asked about the Greens he said it was the view of the media and pollsters that the Greens would be significant after the election.
"It is not our view so we are not going to waste any of our time talking about it."
"We intend to be the third force in the Parliament at the next election."
He reiterated New Zealand First's position of not giving any preference to Labour or National before the election. "The voters will decide this election. We've got months to go. We haven't heard half the policies yet. We are not going to make any decisions until we have."
National deputy leader Bill English said Labour's public rebuff of the Greens was a bad sign for them.
"It's a bit of a problem when two parties that are meant to be able to provide cohesive government go through a process where they fail to get an agreement and then one of them leaks it on the other. That's a pretty bad sign.
"Labour and the Greens have to demonstrate that because there are two parties making up 40 per cent of the vote rather than one, that they are cohesive between them and this little incident demonstrates that they certainly aren't."
He said Greens co-leader Russel Norman had made "roadkill" of Mr Cunliffe. They were competing to be an effective leader of the Opposition and Dr Norman was doing a better job, he said.
- Audrey Young of the New Zealand Herald