Prime Minister John Key is refusing to apologise or resign in the wake of a critical report on the activities of his senior staff.
A report released yesterday strongly criticised the way the Security Intelligence Service (SIS) released information embarrassing to former Labour leader Phil Goff.
Labour Party leader Andrew Little said Mr Key had presided over the dirtiest, grubbiest and vilest operation seen in modern politics.
The Inspector-General of Intelligence and Security Cheryl Gwyn's report is damning of the SIS, saying it released inaccurate and misleading information leading to unfounded criticism of Mr Goff.
Mr Key told Morning Report the report completely exonerated him and he would not apologise nor would he sack anyone.
He said his office was also exonerated.
"The report says that insomuch that there was any information passed, and that's absolutely contested anyway, they were quite within their rights to do that, and actually there was no influence or collusion or compromise from my office."
Mr Key said the problem was the New Zealand SIS did not treat all the requests in the same way.
"It treated one as an OIA and it treated others as media requests. Now that was an error on the part of the service." There had been major reform of the service to make sure it understood its role better.
However Mr Goff told Morning Report the report concluded the release of Government information about him to right-wing blogger Cameron Slater was carried out for political purposes.
"I've never said that it was the SIS that passed that material to Cameron Slater. I have always said that that came out of John Key's office."
Mr Goff said Mr Key should apologise to him for giving the public incorrect information.
SIS director Rebecca Kitteridge yesterday apologised unreservedly to Phil Goff and Andrew Little. Mr Goff said Ms Kitteridge told him she deeply regretted that the SIS fell short of its obligations to him, and that the events had had adverse consequences for him.
Ms Gwyn's report also found that Mr Key's then deputy chief of staff, Phil de Joux, and a chief adviser, Jason Ede, got right-wing blogger Cameron Slater to request information about Mr Goff under the Official Information Act.
Both Labour and the Greens said the Prime Minister must resign for his role in a smear campaign being run from his office.
Labour leader Andrew Little believed Mr Key should do the right thing.
"It would be very easy for this Government to draw a line under it, simply by having the Prime Minister stand up publicly and say to all New Zealanders, 'I was wrong - I should not have had a smear machine operate out of my office'".
Green Party co-leader Russel Norman told Parliament Mr Key's deputy chief of staff, Mr de Joux, had used information from a security briefing in order to smear Mr Goff.
"That is what the Inspector-General of Intelligence and Security has found in her report. It would hardly be more serious for our democracy when our Prime Minister abuses his access to security information in order to smear his political opponents."
Deputy Prime Minister Bill English said Dr Norman's comments were objectionable as he led the House to believe that people in the Prime Minister's office used information to which they had privileged access to to smear their political opponents.
Mr English said that was simply wrong.
"In fact, Phil Goff has broadcast precisely that piece of information ... it wasn't a secret, it wasn't some kind of classified, highly secret information. The Prime Minister's office was verifying that information," he told the House.
Mr Key said at the time the information was actually already in the public domain.
"My office did not direct the SIS, my office did not collude with the SIS, my office did not have any control over the release of the information from the SIS - the only link in the whole report is that the person working on my my staff did have a conversation with Cameron Slater and that's accepted."
New Zealand First leader Winston Peters today said the inquiry was not thorough enough and a full-scale inquiry, which included Mr Key being questioned under oath, was needed.
"Because I think this inquiry, and it's proven by the fact that the most critical person to be asked the number one question - 'were you a part of this, were you involved in any way, were you colluding with your staff to get this information' - was never asked of him. Why not?"