John Key says he was not informed about an application from Kim Dotcom to rent his Coatesvillle mansion in July last year because it was only an "operational matter".
New Zealand First leader Winston Peters hit out at the Prime Minister today saying the office knew about Kim Dotcom six months before Key said he was first aware of the internet tycoon.
The Megaupload founder was arrested in January and faces extradition to the United States on charges of internet piracy.
In a written response to Peters, Key said: "In July 2011 one of
my staff was advised by Hon Simon Power's office by phone that Hon
Power was declining an OIO [Overseas Investment Office] application
from Kim Dotcom.
"This information was not conveyed to me as it was routine."
The OIO application was in relation to the Coatesville mansion Dotcom was planning to rent within Key's Helensville constituency.
Key said today because the matter was a routine procedure his office "didn't bother to take it any further".
"There's nothing terribly new about an application being accepted or declined."
Key's recollection of events in connection with Dotcom has been under scrutiny after he admitted last week he was at a briefing where reference was made to illegal spying on the Megaupload founder in February.
The Prime Minister had earlier claimed he had first found out about the matter in mid-September.
"How long can the Prime Minister continue to deny that he knew
of Kim Dotcom before January 19 (the day before the raid) this
year?" Peters said.
"His senior ministers knew of Dotcom, his Helensville electorate office knew of Dotcom, and now it emerges that the Prime Minister's office also knew of Dotcom."
Labour leader David Shearer said Key had not been on top of his portfolio in the matter.
"We need an independent inquiry that will go into the whole issue from the bottom to the very top."
Peters asked why Power would relay the information to the Prime
Minister's office if it was not intended for Key.
"Mr Key's involvement in the whole fiasco stinks like a sweaty Hobbit's armpit in summer," he said.
Key has recently been in Hollywood meeting movie executives where he said the issue of Dotcom's extradition was briefly mentioned.