John Key, New Zealand's prime minister, has won a third term in office.

With polls closed and more than half of the votes counted on Saturday, Key's centre-right National Party had 49 percent of the vote, while its closest rival, the liberal Labour Party, had just 24 percent.

David Cunliffe, the Labour leader, conceded defeat, admitting his centre-left party could not form a government.

"I have called John Key and congratulated him and acknowledged he will continue to be prime minister of New Zealand," Cunliffe said.

Full results were expected late on Saturday night.

Should the results hold, Key would return to power with a government that has a similar look to the existing one.

Under New Zealand's proportional voting system, parties typically must form coalitions to govern for the three-year terms.

Early voting indicated several coalition options for Key, and even the possibility that his party could govern outright - something that has never happened since the proportional system was introduced in 1996.

In the last election three years ago, the National Party won 47 percent of the vote.

Supporters say Key's party has managed New Zealand's economy well during its six years in office. The economy has been growing at a four percent clip, while unemployment has dropped to 5.6 percent.

Morever, the government projects it will begin running budget surpluses this financial year following years of deficits.

Source: Agencies