'Ecstatic' New Zealand PM declares election victory

WELLINGTON - New Zealand's conservative Prime Minister John Key swept to a historic election victory on Saturday, securing a third term as voters ignored campaign allegations of dirty tricks and mass spying.

The resounding win makes Key the first New Zealand leader able to govern in his own right since proportional voting was introduced in 1996 and means his centre-right National Party has increased its vote in all three elections he has contested.

"I'm ecstatic, it's a great night," the 53-year-old former currency trader said after a result that confounded opinion poll predictions of a tight race.

"It was a tough campaign but I think that people could see the country was on the right direction and they rewarded us. I'm just very grateful," he said, referring to the claims of underhand tactics that dominated campaigning.

National won 61 of 121 parliamentary seats, up from 59 at the last election in 2011, while the main opposition Labour Party managed only 32, down two, after its worst performance since the 1920s.

Labour leader David Cunliffe, facing questions over his future, said it was time to rebuild the centre-left party, not lay blame.

"I'm certainly happy to take my share of blame for this result, but I'm getting consistent feedback from people that they want me to muscle up, to carry on and drive through the change that we need," he said.

Internet-Mana, bankrolled by flamboyant tech mogul Kim Dotcom in a bid to oust Key, did not win a single seat after attracting only 1.26 per cent of the vote, a failure the German national said he blamed himself for.

"I'm sorry. I take full responsibility for this loss tonight because the brand Kim Dotcom was poison for what we were trying to achieve and that only became apparent to me in the last couple of weeks," he said.

Support for the Greens slipped 1.1 per cent to 10.0 per cent, well short of the 15 per cent it was targeting while the populist New Zealand First Party (NZF) increased its number of seats from 7 to 11.

NZF had been tipped as a potential kingmaker in a hung parliament but such was Key's dominance that he does not need to negotiate to retain power.

'Dirty tricks' campaign

Policies largely took a back seat in the campaign to allegations of government dirty tricks and smear campaigns, along with accusations Key's administration allowed mass spying on the population.

The charges were sparked by the publication of the book "Dirty Politics" which cited hacked emails apparently showing that senior government officials conspired with a right-wing blogger to smear political opponents.

Dotcom, who accuses Key of working with Washington to arrange his arrest on online piracy charges, also accused the prime minister of giving spy agencies a green light to snoop on New Zealanders.

Key denied any wrongdoing and dismissed the allegations as a "distraction" that would be ignored by voters more interested in strong leadership and the economy.

The National Party stuck to a strategy of emphasising New Zealand's economic growth while relying on the personal popularity of its charismatic leader, referring to itself as "Team Key".

It paid off as Key's approval rating held steady, reaching close to 70 per cent in some polls, finally translating to victory on election day.

Cunliffe said there would be continuing fallout from the claims aired during an election campaign that he described as extraordinary.

"There's never been one like it. A campaign beset by dirty politics and sideshows involving potential abuses of power at the highest level that will take months to unravel," he said.

"But New Zealanders have chosen to continue (with Key) and we respect their choice."