Prime Minister John Key says he believes the elite Afghan police unit did maintain control of the operation to quell the attack in Kabul last week which claimed the life of an SAS soldier.
Corporal Doug Grant, 41, was killed during a mission to rescue staff of a British cultural centre in the Afghan capital who were trapped in a Taliban attack on Friday.
The soldier's death has renewed debate about New Zealand's military presence in Afghanistan.
Mr Key told Morning Report the SAS is only brought in when the of the 280-strong elite Afghan Crisis Response Unit is struggling.
"What the SAS are telling me is that the capability of the crisis response unit is dramatically improving," he said.
In June this year, New Zealand SAS soldiers were involved in a battle with insurgents in the Intercontinental Hotel in Kabul and two were wounded.
Mr Key said his understanding is that the capability of the unit has improved further since then. He reiterated that there is no intention to change the March 2012 withdrawal date for New Zealand SAS troops.
The Prime Minister said he did not expect a request for New Zealand to extend its commitment in Afghanistan when Britain's special representative to Pakistan and Afghanistan Mark Sedwill visits this week.
Mr Key says there are a number of countries indicating they would be willing to take over the work of the SAS mentoring the local Afghan Crisis Response Unit.
Defence Minister Wayne Mapp told Checkpoint it is unlikely that the SAS mission in Afghanistan will be extended beyond its current withdrawal date of March next year.
Handover will take time - ISAF
A senior member of the group charged with supporting the growth of the Afghan National Security Forces says New Zealand should not be rushing to pull its soldiers out of Afghanistan.
Brigadier General Carsten Jacobsen of the International Security Assistance Force (ISAF) says the Afghan National Security Forces are getting better and better and are now involved in nearly every operation.
"They're right out in the front, they're paying a tremendous blood toll in this battle against the insurgency."
Brigadier General Jacobsen says the handover to the Afghan National Security Forces will take some time.
A spokesperson for Afghanistan's Ministry of the Interior, Sediq Seddiqi, says New Zealand should be praised for its work in Afghanistan.
Mr Seddiqi says the Afghan National Security Forces are very well trained, and are now capable of taking over the responsibility of fighting the insurgents.