UPDATED 3.13pm The Green Party is open to a three-way with New Zealand First in the deal it's struck with the Labour Party.

They've signed a Memorandum of Understanding that will see them work more closely together in the lead up to next year's election campaign.

SEE ALSO: Labour and Greens uniting to defeat National

But both Labour leader Andrew Little and Green Party co-leader Metiria Turei are at pains to point out that doesn't automatically mean a post-election coalition.

"Yeah I think let's not get ahead of ourselves. The voters must speak. That's the job of a general election," Mr Little said.

LISTEN ABOVE: Grant Duncan, Associate Professor of Politics at Massey University, speaks with Rachel Smalley

Labour and the Greens say their unification is the new reality, under MMP.

Mr Little said it's no different from National having coalition parties.

"It's two parties who've come together to challenge a coalition Government made up of three parties, they've got three leaders."

Ms Turei said they have no concerns about working with New Zealand First.

"The MoU is very clear that we are open to working with other parties who share the same commitment to change the Government."

However New Zealand First Leader Winston Peters won't say if his party could work with such an arrangement after the next election.

"Politics is about the maths. We're not worrying about the permutations that you [the media] might construct. None of these arrangements are going to have any effect on me and my party whatsoever," Mr Peters said.

Mr Peters said if he was a Labour or Greens supporter he'd be scratching his head, because the alliance indicates their policies are up for compromise.

"Politically speaking, or strategically speaking, this is not a nice estimation, a sound idea, for all those who want to see an economic and social change to the way the country's run."

Prime Minister John Key said Labour's been moving towards The Greens for some time and their Memorandum of Understanding simply confirms it.

"I think they are vacating the middle ground. I think middle New Zealand will see that and from National's perspective I'm not convinced it does much to our electoral chances."

United Future leader Peter Dunne isn't expecting a lot from the new relationship between the two parties.

He believes it formalises an informal arrangement that's been around for sometime and he doesn't think it'll change their electoral fortunes.

"I don't think it will have a great impact. It will have a bit of an impact for a while in terms of the drama, but look at it in three months time, I don't think much will have changed."

The National Party find it hardly a surprise with Cabinet Minister, and National Party campaign manager, Steven Joyce not rating it as big news.

"It's not going to be a surprise to New Zealanders. I don't think they're going to sit at home and watch their TVs and go 'wow, whoever saw that happening.'"