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Mr Key's admission comes as Justice Minister Judith Collins, another key figure in investigative writer Nicky Hager's Dirty Politics, changed her story over whether she fed the name of a public servant to blogger Cameron Slater, before Slater launched an online attack on the official.
Mr Key has previously said he did not know whether Mr Ede accessed Labour's computer via a security flaw in 2011.
Mr Slater and the National Party admitted at the time that they had done so but the involvement of Mr Key's office was one of the key new claims in Mr Hager's expose of the National Government's alleged dirty tricks strategy.
However, speaking on TVNZ's Breakfast this morning, Mr Key said: "Jason became aware of that (security flaw) , and he did go and have a look." He said he did not know Mr Ede had done that at the time.
"I probably should have known, because there was some correspondence between National and Labour that a person had." Mr Key agreed Mr Ede had used a back-door way into the website.
Mr Ede, who is now working on National's re-election campaign has so far not responded to the Herald's calls and messages. When the Herald called at his Hutt Valley home yesterday a woman said he was not there and then recited a prepared statement informing the Herald it would be trespassed if it came to the door again.
Meanwhile, on Radio NZ this morning Mr Key would not say whether it was appropriate for Ms Collins to tell Slater the name of a public servant, who was thought to have leaked politically embarrassing information to Labour.
Hager's book details how in a series of subsequent blog posts, Slater accused the Internal Affairs employee Simon Pleasants of leaking the information leading to death threats being made against him in the blog's comments section.
"I don't have the details on that on," Mr Key said this morning.
When pressed, he would not give a yes or no answer, adding: "People can see that this is a smear campaign by Nicky Hager."
Mr Key said he stood by Ms Collins.
Ms Collins last week confirmed she had given the man's name to Slater telling NewstalkZB: "What I was asked for was the name and the title of the guy and that's publicly available and I've simply given him that".
However, she yesterday changed her position telling the Herald she did not give Slater Mr Pleasants' name as Slater already had it.
She had not indicated to Slater she believed the man was responsible for leaking information to Labour she said.
"I didn't even know who Mr Pleasants was. What I knew is that I was asked for what this person's title's. So I gave the title and of course the name goes with the title." "The information I gave to Cameron was no more than what was in the public domain, the fact that he worked at ministerial service was publicly known.
She gave the information to Slater "because I was asked by Cameron for the title of that particular person who he knew the name of".
Mr Key told Newstalk ZB that Hager's book would "not really" hurt National's election chances.
He reiterated his claim that Hager was a "left-wing conspiracy theorist" who had got his facts wrong.
Mr Key said there was "a side of politics which is a bit more rugged" and that was true of all political parties.
The left also briefed bloggers, he said.
Last week had been full of smears from the left, Mr Key said.
- Adam Bennett of the New Zealand Herald