Labour Party foreign affairs spokesperson David Shearer says any changes to laws surrounding foreign fighters' citizenship must be considered very carefully and not on an ad hoc basis.
Australia is looking at cancelling the citizenship of people who travel to Syria and Iraq if they are also citizens of another nation.
The issue has arisen following reports of a dual New Zealand and Australian citizen, who travelled to Syria last year, for what were believed to be humanitarian purposes.
The woman now wanted to return to Australia, but Australian Prime Minister, Tony Abbott, is expected to present laws to Parliament to take citizenship away from those who go abroad to fight for extremists.
Mr Shearer said changing the law in this country would have to be done in a way that ensured New Zealanders rights and freedoms were upheld.
"If anybody has broken international law and law that we are party to agreement to in the form of human rights abuses or things like that.
"My understanding is that we are likely to be able to address that under our domestic law in virtue of those international agreements we have signed up for."
Green Party global affairs spokesperson Kennedy Graham said the Prime Minister was constantly trying to change the laws to get up to speed with foreign affairs as he saw it.
"If anything the Terrorism Suppression Act needs to be, not tightened, but made more compatible with civil liberties.
"The definition of terrorism is far too broad and if there is a review coming down the track on the spy agencies - one of the principle things the review needs to look at is the definition of terrorism itself."
Mr Key said the Government would not go down the same line as Australia and consider cancelling foreign fighters citizenship as it did not want to leave people stateless.
However, he said he would consider some kind of law change to address the issue of foreign fighters returning to New Zealand.
"There are conditions within the Terrorism Suppression law which may allow us to do something. Whether we need to toughen that up is something we would need to look at," he said.
"But the question is whether we need to expand the authority of that Act, but as I say not necessarily take the step that some people have talked about which is the cancellation of citizenship."
The review of the country's security and intelligence agencies will begin next month, led by former deputy prime minister Sir Michael Cullen and lawyer Dame Patricia Reddy.
It will look at the laws governing the agencies and whether they are able to protect national security, while also protecting individual rights.