The Prime Minister is not confident New Zealand First would support a National-led Government after this year's general election.
Talking to Radio New Zealand National's Nine to Noon programme in the first of a series of leaders' interviews on Wednesday, he said he also believes there is a chance New Zealand First will not win enough votes to get back into Parliament.
Mr Key says if New Zealand First does get back into Parliament and National requires its support to govern he is not sure its leader, Winston Peters, would do a deal to be part of the Government.
"Whether he in fhe final analysis would ever come with us is very uncertain," he says. "My own personal view, and it's not necessarily supported by all of my senior ministers, is he's only at best likely to abstain."
The Prime Minister says if Mr Peters did agree to support the Government it is more likely he would become a minister outside the Cabinet.
Mr Key says National might also do deals - as it has in Epsom and Ohariu - to encourage its supporters to vote for other parties' electorate candidates to ensure they make it into Parliament.
He has indicated that could include the Conservative Party if it appeared it could win enough party votes to bring two or three other MPs into Parliament.
"Obviousy he would bring in some but that wouldn't be the only test. It would be could we work with him; what would his conditions look like?"
Mr Key says he's had no discussions with Mr Craig about those matters.