Key says will vote for English as National leader in December 12 caucus vote; says National can win 4th and 5th terms with English as leader; Key says wants quieter life with family; eyes board positions in Australasia or Asia

By Bernard Hickey

Finance Minister Bill English is set to become the next Prime Minister of New Zealand as soon as next Monday, although he has not formally put his hand up for the job yet.

John Key's shock decision to resign as Prime Minister has set the ruling National Party up for a short contest for leader or coronation of a new leader in just seven days.

English put out a statement paying tribute to Key, but did not specifically say he would stand for the leadership.

He held a news conference this afternoon to say he would consult with caucus members and his family before making a decision in the next 24 hours. He said he did not expect an early election because of the leadership change and said he did not expect a lengthy or divisive contest for the leadership, suggesting he expected the caucus to quickly coalesce around a leading candidate.

"The caucus has only known about this for two or three hours and I think we just want to give ourselves a bit of space," English told reporters in Parliament.

"I personally would like to be able to talk to members of caucus, talk to my famiIy in considering it. I certainly appreciate John's endorsement," he said.

Key said he told English of his plan in September and it would be unthinkable for Key to endorse English without English wanting the job or having the numbers. The other contenders are seen as Steven Joyce, Paula Bennett and Judith Collins.

Key has made his preferences clear in his statement and in a news conference.

"I didn't want ambiguity on my part," Key said at the news conference.

"If I didn't think he was right to be Prime Minister, then I shouldn't have thought he was right to be deputy," he said.

"Whoever becomes the leader, and I have put the cards on the table -- the cards that I hold -- I think they will be a fine PM and I think they will demonstrate to the country that they are worthy of a fourth term," Key said.

"And so often in politics leaders leave because there's a coup and they stay a bit too long and they white ant the next leader and there's no clear air for the person to take over and demonstrate what they are capable of doing," he said.

"And what the country wants is strong and stable leadership and I think if we can transition to a new leadership team and do that efficiently, with unity and dignity, then I think we can provide that."

'No pre-arranged deal'

Key denied he had a long-established deal with English to hand over the leadership, as was the case with the British Labour Party's Tony Blair and Gordon Brown.

"I am not going for those reasons, no," Key said. "He, I think, genuinely believed he would never get the chance to do this and he has been the most utterly loyal deputy that I think the country has ever seen," he said.

'Economy the major success'

Key said the economic leadership of the Government had been his biggest success, along with its response to various crises.

"Very few countries are in the financial position we are in. We are strong, we are in surplus, we are growing, we are creating jobs, we are doing well. I think secondly we have shown good leadership in those difficult times NZ has faced, whether it be the Christchurch earthquakes, most recently Kaikoura, I think with Pike River, the Rena, the Global Financial Crisis, there has been a lot of things there," he said.

"I do think as a govt I am very proud of what we have achieved in terms of trying to help vulnerable New Zealanders. There was a lot of advice to me to pull the rug out from underneath them in 2008/9 when I first came in and I stood by those people," he said.

"And I know there will always be people who say I didn't do enough, but I think that we did everything that we could practical to the circumstances that we had."

Little ready for election

Labour Leader Andrew Little said he was just as surprised as everyone else at the decision.

He paid tribute to Key for his contribution to Government.

"John Key has served New Zealand generously and with dedication. Although we may have had our policy differences over the years, I respect the Prime Minister’s decision to stand down," Little said.

“I can empathise with his reasons. Politics requires much sacrifice. We may all be politicians, but not all our lives are politics," he said.

“The Prime Minister has served New Zealand through times of considerable global instability, and will leave politics proud of his achievements. I wish him and his family the best for the future."

Labour was ready to fight the next election, even if there was an early election, he said.

(Updated with more detail, reaction, English's comments)