The master conjurer not only pulled a couple of rabbits out of his top hat this week, he had skinned and gutted them before you could cry ''Hone Harawira'' or ''Te Uroroa Flavell''.
In ruling out working with the Internet Mana party because it is a ''race-based party'', Mr Peters effectively pulled the plug on his party's participation in what at best would be an unwieldy four-party government and at worst a highly unstable one.
Mr Peters has judged that being the kingmaker responsible for what would be a left-dominated government would be the death of NZ First regardless of the concessions he might be able to negotiate in return for providing the numbers to get it over the line to enable its establishment.
David Cunliffe might have kept Mr Peters on board by ruling out any working arrangement with Mr Harawira and friends. But he refused to do so perhaps in the vain hope that Labour, the Greens and Internet Mana might win just enough seats to cut NZ First out of the power equation.
That is dreaming.
The reality is more the stuff of nightmares - most notably Labour's crumbling poll ratings which are responsible for the mess on the left and into which NZ First finds itself being dragged.
Mr Peters' ban on his party working with Internet Mana has also quietly dealt with another dilemma.
While he could have formed a government with Labour alone were the latter's support to lift significantly at next month's general election, such an arrangement would still have most likely had to have been propped up by some very grumpy Greens feeling ill will at being shut out of the action.
Again, instability beckoned.
Not so on the right, however.
Mr Peters has applied the same working ban to the Maori Party.
Because the latter is likely to be wiped out as a parliamentary force on election day anyway, the impact on National will be negligible.
And there lies the rub.
Mr Peters' stance on working with ''race-based'' parties has wide-ranging implications which are not immediately obvious.
Similar significance applies to this week's other major political development: John Key's decision not to gift an electorate seat to Colin Craig and his Conservative Party.
The separate announcements might seem unconnected. But if you join the dots, you reach an unavoidable conclusion: unless National can achieve what is considered to be the near impossible and muster enough votes to be able to govern alone, then the next Government is odds on to be a National-NZ First one.
Mr Key's demeanour towards Mr Peters has certainly undergone a change.
Mr Key assumed Mr Peters would punish him for refusing to include Mr Peters in post-election negotiations in 2008 and 2011.
Mr Key has now ensured Mr Peters is the clear winner from National's decision not to relinquish Murray McCully's East Coast Bays electorate, thereby giving the NZ First leader a huge advantage when it comes to soaking up the votes of provincial and back-blocks conservatives who have yet to be convinced the economy is on the up or who bristle at Mr Key's attempts to appeal to metropolitan-based liberals.
Mr Peters will secure these votes because those who hold them know NZ First will clear the 5% threshold, whereas Mr Craig's party probably will not.
Mr Key has not done this out of kindness. He has done it because it obliges Mr Peters to negotiate with him first post-election because that conservative chunk of the vote expects Mr Peters to serve as a brake on National.
The last thing those voters want to see is Mr Peters installing a Labour-Greens-Internet Mana administration.
Mr Key has also done it in the hope that NZ First can find a permanent niche on the political spectrum and thus provide National with a long-term ally able to deliver at least a handful of seats to keep the centre-right in power.
While erecting his standard brick wall to specific questions regarding this scenario, Mr Peters has dropped sufficient hints to suggest he is not averse to Mr Key's strategy.
Mr Peters has little choice in the matter, however.
Labour's crumbling poll ratings have cost Mr Peters the leverage over Mr Key and Mr Cunliffe he previously seemed well-positioned to enjoy.
Mr Peters' long-standing gambit of refusing to divulge before the election which of the two major parties he would prefer as a partner in a coalition or some other government support arrangement has been rendered worthless.
Mr Peters knows Mr Key knows Mr Peters can no longer play him off against Mr Cunliffe because the latter is staring down the barrel of a defeat that could be even worse than the horrendous result in 2011.
The rolling average of the various public polls now has support for Labour slumping to just under 26%.
Victory would require both NZ First and Internet Mana to clear the 5% threshold and pick up one or two percentage points on top of that, but not by siphoning off any more votes from Labour or the Greens.
Furthermore, all this requires that support for National drops below 47%, the level the governing party recorded last time, as well as the Conservatives failing to clear the threshold.
Things get a little easier for the centre-left if Labour can claw its way back to the 30% mark.
But it would still require good showings by both NZ First and Internet Mana. An unlikely Labour win requires that every variable in these complex equations comes up trumps for Labour.
Fairy tales and political reality are rare bedfellows, however.
Even then Mr Peters would have to give National, as the largest polling party, first shot at negotiating a deal.
And events are conspiring to make it ever more likely that Mr Key and Mr Peters will strike one if need be.
• John Armstrong is The New Zealand Herald political correspondent.
