Prime Minister John Key says Solid Energy was not discouraged from buying the Pike River mine.
The state-owned coal company is in financial difficulty, with debts of more than $390 million.
When Solid Energy bought the mine last year it said it would take all reasonable steps to recover the bodies of 29 miners who died at the West Coast mine in explosions in November 2010, provided the recovery plan was safe and financially credible.
Asked on Monday if the Government encouraged Solid Energy to buy the mine, Mr Key said they weren't discouraged, and to the best of his recollection it was Solid Energy's idea.
Mr Key says he "vaguely remembers them raising the issue with us. They weren't a buyer at any price."
Mr Key says the Government believed Solid Energy had the best chance of understanding conditions for body recovery, and had a strong relationship with the West Coast mining community.