A referendum on MMP is likely to be held at the 2011 general election, Prime Minister John Key says.
The Government has begun work preparing for a binding referendum to be held on the Mixed Member Proportional voting system.
Mr Key says it is important to have a larger voter turnout because it is a constitutional issue and it is likely the referendum will be held at the same time as the general election.
Mr Key says the National Government wants to honour its election commitment to hold a referendum but does not know if there is a mood for change.
He believes New Zealanders have become accustomed to a proportional system and doubts they will want to return to the First-Past-the-Post system.
It is unclear whether one or two referendums could be held; the first to decide whether MMP should be retained, and then if needed, a second to decide on an alternative voting system.
Another option is posing both sets of questions in a single referendum.