PM reveals election date: September 20

UPDATE: The election will be held September 20, Prime Minister John Key said at his post cabinet press conference this afternoon.

The PM said he chose the early date to allow for the possibility of lengthy post-election coalition negotiations. It would allow a government to be formed before the G20 meeting in Australia, November 15 - 16.

Opponents see an effort to skirt the impact of higher interest rates with a series of OCR hikes anticipated from Thursday.

Parliament will rise July 31.

The last possible date for the next general election was Saturday January 24, 2015. With Christmas holiday season campaigning unfeasible, most had expected Key to name a date in September, October or November this year.

The PM warned post-election coalition negotiations could take six to eight weeks.

"In 2008 and 2011 we had very clear results on the night, but none of us can rule out that on election night no one knows who has won [this year]," Mr Key said.

He said he was the only Prime Minister to have consistently given a firm date months out for each election. 

Mr Key said he would also be transparent about which parties National would enter coalition with, and on what terms.

He added he had no expectation all third parties would actually follow that principle.

Flashing back to the first MMP election - a two-month debacle
The 1996 election - the first under MMP - was held on October 12.

But it was not until December 10 that king-maker Winston Peters finally announced NZ First would enter coalition with National. 

Complicating matters, under MMP the party with the largest vote does not automatically get first dibs at forming a government. 

Possible flag referendum
The Prime Minister has been talking up a possible referendum on the flag, which could coincide with the September 20 general election. He will give a speech on the topic tomorrow.

Cunliffe raises royal concern
Most pundits have praised the PM for naming the election date so far out.

But the gaffe-prone David Cunliffe has reportedly expressed concern about the hosting of the visit of Prince William and the Duchess of Cambridge in an election year, saying there was a convention for a gap of at least six to eight months between a Royal visit and an election.

The Labour leader's argument would have had strong currency in 1953.

Today, it's unlikely the Royal couple will weigh in on the issue, while Prince George, at seven months and 16 days old, is too young to form a complex cognitive reaction to the Mr Cunliffe's concern.