Judith Collins and Bill English are two names that are being touted about to be the new Prime Minister of New Zealand.

Jonathan Coleman is also running for the country's top position.

John Key announced yesterday afternoon he will be stepping down as Prime Minister and leader of the National Party.

John says he will stay on to see out his term as MP, while a new leader will be voted by caucus before Christmas.

He says he always believed the job of Prime Minister is about leaving the country in a better place than he left it, but believes the public will decide that.

Jonathan Coleman has welcomed the news of Judith Collins' leadership bid, saying it is 'great that people are putting their hat into the ring”.

'It's very important that the caucus gets a choice in what is obviously a very important decision, so I welcome new entrants to the race.”

Jonathan says the race is 'a blank canvas”, with no rules around deputies, but it was important that the National caucus 'collectively hold our shape”.

'Obviously people are going to want to know the views of the various candidates but in the end we've just all got to get behind the new leader, whoever that may be.”

He says he had not yet made a decision for his preferred deputy.

'I can work with a range of people, and this is very early on in the process and let's just see how it unfolds.”

Simon Bridges says he is keeping his options open on a bid for the leadership or deputy leadership, as the race expands to a three-way contest.

'I haven't made any decisions about any of those things and I'm still assessing my options and looking at the leadership candidates we've got coming through.

'I'm not going to litigate those matters in the media at the moment...they're matters for the caucus room and discussion with colleagues.”

-Additional reporting from Sutff.co.nz