Budgets on agenda for Key's talks with UK PM

Government budgets were high on the agenda as Prime Minister John Key met his British counterpart David Cameron for dinner at 10 Downing St in London today.

The meeting was also likely to canvas issues such as reducing bureaucracy, air passenger duty and coalitions.

Mr Key, who today meet the Queen at Windsor Castle, with the Christchurch earthquake a topic of conversation.

He said he had been given warm welcome -- which extended to a hand-licking from one of the royal corgis.

He and the Queen shared champagne and ate hollandaise eggs, beef, a "delicious" panna cotta dessert and cheese.

Mr Key said it was fulsome and delicious.

On a trip consisting of official meetings and attendance at the royal wedding, Mr Key started his day with a speech to expatriates about next month's "zero budget".

The "promising you nothing" budget was completed five weeks ago, he said.

Rebuilding Christchurch after the February 22 earthquake would cost $20 billion-$25 billion and that there was only $15 billion available, he said.

His preferred option to make up the deficit was not to increase debt or introduce a public levy but to reduce public expenditure.

Mr Key told members of the KEA expatriate networking group, which included former All Black Zinzan Brooke, opera singer Kiri Te Kanawa and New Zealand business supporter Lord Denman, that the "outlook for growth is very strong for New Zealand".

He put that down to the primary sector of dairy, beef, land, wool and forestry and Asian export markets that were "growing exponentially".

Attracting overseas business through an expansion of the fund management industry was part of the budget, with billions of dollars earmarked by banks to come to New Zealand, he said.

Plans for a zero rate for a foreign trust that administered funds in New Zealand, where those funds were not invested in New Zealand, was a "very significant move".

He also met partner and chief executive of Evans Randall investment bankers Kent Gardner, who is behind the Step-Up for Christchurch fundraiser, which aimed to raise Stg250,000 ($NZ510,000) for the Christchurch earthquake appeal through a race up the prominent London building, the Gherkin on May 22.

Tomorrow he is scheduled to meet French president Nicolas Sarkozy in Paris before returning to Britian to meet the Prince of Wales and chancellor George Osborne.

On Friday he will attend the wedding of Prince William and Kate Middleton, returning to New Zealand on Saturday.