David Lange, who has died of kidney failure aged 63, was easily the best loved New Zealand political figure of the last 20 years. He was prime minister of the fourth Labour government from 1984 to 1989, which transformed the previously heavily protected New Zealand economy in what was seen as the most radical reform of any economy anywhere in the industrialised world. He was also an eloquent spokesman for the New Zealand nuclear-free policy, which led to enduring coolness from the United States, but which has remained unaltered through succeeding National and Labour-dominated governments.
Lange and Labour swept to victory in a snap election in July 1984. At 41, he was the youngest prime minister in a century. By election day, the then National party prime minister Robert Muldoon's increasing struggle to protect the economy and the fixed exchange rate had produced a run on the New Zealand dollar. Seizing the opportunity, Lange's treasury team, led by Roger Douglas, devalued the dollar and set in train a series of measures to deregulate the economy.
All farm support was removed overnight in the 1985 budget, the dollar was floated and the central Reserve Bank was given the responsibility of controlling inflation. One by one, hitherto government-owned commercial activities, such as forestry, telecommunications, government printing, and railways were distanced from direct government control as state-owned enterprises, a move that to Douglas and his treasury colleagues, if not to the rest of the Labour government and party, was clearly a precursor to privatisation.
During his first term as prime minister, Lange was also minister of foreign affairs. Although originally lukewarm on the anti-nuclear policy with which his party had come to office, Lange came to be its principal champion and advocate. A major factor in the development and popularity of the anti-nuclear movement in New Zealand had been the frequent visits to New Zealand ports of nuclear armed and powered US Navy vessels. In 1985 the Lange government introduced nuclear-free legislation, banning all such vessels from New Zealand waters.
Inevitably, this move created serious tensions with the country's closest allies, particularly Australia, the US and Britain. While Margaret Thatcher's government kept channels open, Washington cut off such contact and also excluded New Zealand from the highest levels of shared intelligence. With formidable wit, Lange memorably defeated the American TV evangelist Jerry Falwell in a televised debate on nuclear weapons at the Oxford Union in March 1985. "Lean forward," he said, "I can smell the uranium on your breath."
That year too he confronted France, when its agents mined the Greenpeace ship Rainbow Warrior in Auckland harbour. The vessel had been about to sail to the French nuclear weapons test zone in the south Pacific
Lange was born in Otahuhu, Auckland, the son of a prominent local doctor and a colourful, outspoken Australian-born mother. Educated in the local state school system, he graduated in 1966 with a law degree from Auckland University, and was then admitted to the bar of the New Zealand Supreme Court.
Lange then travelled overseas, during which time he worked at the Methodist Central Mission in London with the late Donald Soper. One of his colleagues at the Central Mission was Newark-born Naomi Crampton, whom he subsequently married.
Returning to New Zealand, Lange practised as a lawyer in the small Northland town of Kaikohe. He then returned to tutor in law at Auckland University, while he completed an LLM with first class honours in criminal law, criminal behaviour and medico-legal problems.
Between 1970 and 1977 Lange practised law in Auckland, often free of charge for low-income clients. He soon earned a reputation as a quick-witted and humorous advocate. After unsuccessfully contesting a safe National party seat, Northland, in 1975, Lange entered the New Zealand parliament early in 1977 in a byelection for the safe Labour seat of Mangere in South Auckland. After a resounding 1972 general election victory Labour had been devastated by the loss in August 1974 of its prime minister Norman Kirk. The international oil shock and economic downturn coupled with the advent of Robert Muldoon, then a tough, populist leader of the opposition, combined to turn the electoral tables resoundingly against Labour at the 1975 election.
In this environment, the large and witty figure of Lange came quickly to be seen as a saviour. Elements in the parliamentary Labour party began to see him as an alternative to the then leader, Bill Rowling. Dissuaded in 1979 from challenging Rowling for the leadership, he nevertheless became deputy leader. At the end of 1980, his leadership challenge failed by one vote, and he duly became the Labour leader in February 1983 after Rowling stood down. Seventeen months later came Lange and Labour's victory.
By early 1987, Lange had begun to be troubled at the economic direction his government was taking and at the growing impression that Douglas was more in control of its direction than he, Lange, was. He was also alarmed at increasing hints that Douglas had set his "market knows best" sights on social policy.
After returning to office in August 1987 with an increased majority, Lange's subsequent cabinet reshuffle sought to weaken the Douglas/Treasury influence. He took up the education portfolio himself, and managed to preside over a long overdue overhaul of the organisation of the state schooling system. Self-managing schools are an important feature of his political legacy.
By late 1987, however, the tension between Lange and Douglas was beginning to turn into guerrilla warfare. After the cabinet had agreed to a post stock market crash package in mid December, including a flat tax proposal, in January, Lange unilaterally announced to the media that he had cancelled the package. The situation continued to unravel for another 18 months before Lange resigned as prime minister in August 1989. He continued outside cabinet as attorney general until Labour's defeat at the polls in October 1990.
Lange retired from the New Zealand parliament at the 1996 election. He was in demand as a public speaker, wrote two or three books and newspaper columns. After Labour's return to power in 1999, he sat on several government committees. His wit was undiminished.
However, after he ceased being prime minister he often seemed a rather lost soul, troubled by the human consequences of the economic policies of his government. His always witty appearances as a public speaker-cum-entertainer were often also rather sad. He believed that he had peaked too early, and some prior experience as a minister may well have given him skills as a chairman and team leader he lacked as prime minister.
He had an abiding love for India- among his friends was the late Rajiv Gandhi - and he visited the country a number of times. And curiously, during his tenure as prime minister, he continued to race motor cars.
From his childhood Lange always had problems with his weight. During the last 20 years, he had operations to reduce the pressure on his heart. In 2002, he was diagnosed with amyloidosis, a rare, incurable blood plasma disorder and underwent extensive medical treatment.
Lange was created a Companion of Honour in 1990 and an Ordinary Member of the Order of New Zealand in 2003.
After he resigned as prime minister, his first marriage ended. He then married Margaret Pope, a long-serving member of his staff. She survives him, as do two sons and a daughter from his first marriage and a daughter from his second.
· David Russell Lange, politician, born August 4 1942; died August 13 2005