Voters in New Zealand have begun casting their ballots in a general election that has Prime Minister John Key seeking a third term in office.

Polls indicate Key's centre-right National Party is the most popular party, and Key is the front-runner to remain the country's leader. But that could be in jeopardy if opposition parties gain more than half the parliamentary seats and form a coalition.

Key's closest rival is David Cunliffe, leader of the liberal Labour Party. His party has pledged to build tens of thousands of inexpensive homes for first-time buyers to combat a pricey housing market.

Supporters say Key and his colleagues have managed the economy well during six years in office. The economy this year has been growing at 4 percent, while unemployment has dropped to 5.6 percent. The government projects it will begin running budget surpluses this financial year following years of deficits.

The campaign was marked by a scandal after investigative journalist and liberal activist Nicky Hager published a book "Dirty Politics" which exposed the extent of the National Party's links with a conservative blogger. Justice Minister Judith Collins resigned from her ministerial portfolios after Key said she colluded with the blogger to try to undermine the director of the Serious Fraud Office, whom Collins oversaw.

Also contesting the election is a party funded by indicted Internet entrepreneur Kim Dotcom, who founded the now-shuttered website Megaupload. Dotcom is fighting attempts by US prosecutors to extradite him on racketeering charges over the site, which prosecutors say was used to illegally download enormous numbers of songs and movies.

Dotcom says he can't be held responsible for those who chose to use his site for illegal downloads.

Polls close at 7pm (0700 GMT) Saturday with full results expected by 11:30pm (1130 GMT).

Source: AP