UPDATED 10.45am: The Green Party has announced it won't contest the Ohariu electorate this election.

Party Co-Leader James Shaw thinks New Zealanders will understand that, in an MMP environment, it makes perfect sense for his party to not stand a candidate in Ohariu.

"Ohariu is very unusual because it is an overhang seat, and it supports the government.

"Therefore a change in Ohariu would increase the chances that we can change the government at the next election."

Labour is standing former Police Association boss Greg O'Connor as their candidate, in a bid to unseat long-serving MP Peter Dunne.

Dunne was first elected to the seat as a Labour candidate, before leaving the party to start the party that evolved into United Future. 

He is currently a Minister in the National-led government. 

The Green Party and Labour last year signed a memorandum of understanding, that they would work together in a bid to change the government at the next election.

There has been speculation National may now no longer stand a candidate as its own in response.

Peter Dunne said he's not privy to what the National Party might do, its for them to decide and comment on.

"I haven't had any discussions with the National Party about that - they may well occur but Ohariu voters are perfectly capable of working out what they want, and I respect their ability to do that."