A report on Dirty Politics allegations released this morning found former SIS director Warren Tucker failed to take adequate steps to maintain the spy agency's political neutrality.
Speaking soon after the report's release this morning, Mr Key said the Inspector General's report had cleared his office of any wrongdoing and no apology was necessary.
"The report makes it absolutely crystal clear that my office did nothing that was either unprofessional or breached any of the requirements on them."
He also countered Labour's accusations he was using SIS information for political purposes, accusing Labour of leaking selected parts of the Inspector General's report to the media yesterday in advance of its release.
"Yesterday I strongly suspect that the Labour Party did exactly that by leaking this report. The only reason they would have breached the confidentiality agreement and leaked the report 24 hours prior to its release is they know that the very strong allegations they made about my personal involvement weren't stacked up in the report and they were trying to get their own spin on it."
He did not believe the report had cast an unsavoury light on his office.
"It doesn't at all. It says they were fully entitled to disclose any information that they did. I would strongly say it's standard practice for either political advisors or politicians to talk to the media."
His chief of staff, Wayne Eagleson, had not offered to resign and Mr Key said he had no reason to.
He said the processes around the release of the information were all handled by the SIS.he report raised concern about former staffer Jason Ede's use of personal email accounts for official work and Mr Key all staff had been instructed not to use personal accounts.
"That's been the case for some time now."
The inquiry in response to complaint from Green Party co-leader Metiria Turei looked at the release of politically embarrassing information about former Opposition Leader Phil Goff's dealings with the SIS to blogger Cameron Slater.
Inspector General of Intelligence and Security Cheryl Gwyn said this morning the inquiry found the NZSIS released "incomplete, inaccurate and misleading information in response to Mr Slater's request, and provided some of the same incorrect information to the Prime Minister and the Prime Minister's office".
Ms Gwyn said she found no evidence of political partisanship by the NZSIS but did find that the NZSIS "failed to take adequate steps to maintain political neutrality".
Ms Gwyn said the having released misleading information both to Prime Minister John Key's office and then to Mr Slater, Dr Tucker "had a responsibility to take positive steps to correct the interpretation".
"He failed to do so."
On that basis, Ms Gwyn said Mr Goff was owed an apology.
Ms Gwyn said information about a briefing Mr Goff received from Dr Tucker about suspected Israeli agents in Christchurch following the quakes was "not an accurate description of what happened at that meeting".
However, while Ms Gwyn said her investigation revealed a staff member in Prime Minister John Key's office had effectively guided Mr Slater to request information about the briefing, Mr Key's involvement in the matter was "very limited" and he had no input into the decision to release the information.
Current SIS director Rebecca Kitteridge said she accepted all the recommendations made by Ms Gwyn.
"In particular I take my obligation for consultation with the Leader of the Opposition, and the responsibility for political neutrality extremely seriously."
Ms Gwyn found that the information that one of Mr Key's staff members provided to Slater was not classified and it was understood it was provided for media purposes.
"...and there was no breach of confidence towards NZSIS in that disclosure".
Prime Minister John Key this morning welcomed that finding.
"This inquiry process began after a series of political claims that I had personally been involved in directing the NZSIS to release information, or that I had given clearance for this to occur," he said in a statement.
"These claims are proven to be entirely incorrect by the Inspector-General's inquiry.'"
He also pointed to Ms Gwyn's finding that the decision to release information and the timing of when to do so were all made by NZSIS, and that she "did not find any indication of collusion by or direction to NZSIS".
"I have received an unreserved apology from the NZSIS for providing incomplete, inaccurate and misleading information to my office", Mr Key said.
He said the SIS head's apology to Mr Goff was also appropriate.
Mr Key added: "The inquiry finds that a staff member in my office provided information to a blogger but it also notes that disclosure did not breach any obligations of confidentiality."
The Prime Minister said the events occurred three years ago and much had changed since then, including systems in place at the SIS.
In a statement this morning, Dr Tucker also said he accepted Ms Gwyn's findings, "and take full responsibility not only for my decisions but for the systemic errors made by NZSIS at the time".
He said Ms Gwyn had noted the matter had been "inherently difficult" to deal with and the "unique consultation obligations" of his former role gave rise to "controversial" questions and that the disclosure of the information about his discussions with Mr Goff was "unprecedented".
"I fully accept the finding that my ability to both navigate these issues and discharge my obligations of political neutrality - of which I was well-aware - was compromised by my view that my credibility had been placed in issue concerning events that I could well-recall.
"In trying to meet both my obligations under the Official Information Act and those under the NZSIS Act, I felt caught between a rock and a hard place.
"As the Inspector-General has stated, meeting that challenge required more than 'mechanical even-handedness' and I should have sought greater assistance.
"I sincerely regret the errors of judgement this failure caused. As the report notes, none of these were the result of any 'political collusion' of any sort, whether on my part or on the part of NZSIS more widely."
Mr Goff this morning said there was legislation against the Government using SIS as a political football.
"That broke down because of failures within the SIS and failures within John Key's own personal office."
Changes needed to be made both at the SIS and in Mr Key's office, he said.
"I've had an assurance from the director of the Security Intelligence Service that this sort of thing will not happen again under her watch. I've had no such assurance yet from the Prime Minister who's known about this for quite some time."
Mr Goff also said the report was "a sad and damning indictment" on Dr Tucker and highlighted a lack of professionalism on his part.
"He has now left the Service, and I accept the apology given to me this morning by the new Director Rebecca Kitteridge who played no part in this affair."
Mr Goff said the report demanded accountability by Mr Key for the actions of his office, "for which - at the very least - he failed to exercise oversight and in all likelihood knew about and failed to rein in".
"The actions of two of his staff, his deputy chief of staff Phil de Joux and his senior adviser Jason Ede politicised the SIS and broke rules about confidentiality and political neutrality.'"
Mr de Joux was the Dr Tucker's point of contact in Mr Key's office and Mr Ede was the political advisor with links to Slater.
Mr Goff said Mr Key was "fully aware of Mr Ede's political role, his regular contact with Whaleoil and the sleaze and dirty politics that were employed through Whale Oil on an ongoing basis. Mr Key has stated before that his staff act for him".
Mr Goff said Mr Key was expecting Labour to cooperate with the Government on a security and intelligence bill this week in line with the long standing bi-partisan approach on issues that relate to the security of New Zealand.
"Indeed that is the approach that Labour has always tried to take. It is however hypocritical that while calling for bi-partisanship, Mr Key deliberately allowed the politicisation of the SIS by his staff, in a way that fundamentally undermines its political neutrality."
Mr Goff said that at the time of the incident, before information was released to Slater he had reached an agreement with Dr Tucker on how they could reconcile their differing public statements on the issue. However he said Dr Tucker went on to ignore that agreement in his actions.
He said Mr Key had repeatedly misled the public that his office had nothing to do with the release of the information to Slater.
However Ms Gwyn's report showed that his own claims and those made by Nicky Hager in his Dirty Politics book were "absolutely right".
''I simply do not believe John Key when he says he knew nothing about this.''
Mr Goff said Mr Key should accept responsibility for his office's involvement in the affair or resign.
Labour Leader Andrew Little said he was confident after meeting Ms Kitteridge yesterday that she would maintain the service's political neutrality in the future.
- NZME
